Japan’s Finance Minister Katayama delivered a clear warning to currency markets, reiterating Tokyo’s readiness to act against excessive yen moves:
“Intervention included as an option in U.S.-Japan agreement.”
“I have said ready to take decisive action without ruling out any options.”
“Won’t exclude any options” when asked about the possibility of U.S.–Japan joint intervention.
The remarks underline Japan’s growing unease with recent yen volatility and signal that authorities are keeping the full range of countermeasures firmly on the table.
With this, Japan has stepped up its verbal defence of the yen. Finance Minister Katayama explicitly confirming that foreign-exchange intervention remains an option under existing understandings with the United States. The comments come as renewed weakness in the yen revives concerns over imported inflation, market disorder and policy credibility.
Katayama’s remarks reinforce Tokyo’s long-standing stance that sharp, speculative-driven currency moves are undesirable. By stressing that intervention is “included as an option” in the U.S.–Japan framework, the finance minister sought to remind markets that Japan is not acting in isolation and retains diplomatic cover should it decide to step in.
Of particular note was Katayama’s refusal to rule out any options, including the prospect of coordinated U.S.–Japan intervention. While such joint action is rare and typically reserved for periods of extreme market stress, the reference alone is designed to raise the perceived cost of betting aggressively against the yen. Discussing possible joint intervention always carries more weight with JPY traders, increasing their wariness of holding short yen positions.
The renewed warning follows a period of sustained yen weakness, driven by wide interest-rate differentials between Japan and the United States and expectations of further fiscal spending in Japan. Even as the Bank of Japan has begun to normalise policy after years of ultra-loose settings, Japanese yields remain far below U.S. levels, limiting the currency’s natural support.
Historically, Japanese authorities have preferred to rely on verbal intervention first, escalating to actual market operations only when moves become disorderly or one-sided. The last episodes of yen-buying intervention were framed as responses to excessive volatility rather than targeting any specific exchange-rate level.
The backdrop is complicated by heightened political sensitivity around currency moves. A weak yen boosts export competitiveness but also raises import costs for energy and food, squeezing households at a time when inflation remains a key public concern. That tension helps explain why officials continue to emphasise readiness for “decisive action.”
For now, Katayama’s comments stop short of signalling imminent intervention. But by explicitly referencing joint action with the United States and refusing to rule out any tools, Japan has delivered a clear message: authorities are watching closely, and tolerance for rapid or destabilising yen moves is limited.
