By Kosaku Narioka
The Japanese yen surged after sliding to levels rarely seen in the past four decades, prompting Japan's finance minister to step up warnings against currency speculators and signal a potential intervention.
The dollar traded at 155.54 yen after reaching 160.72, the yen's weakest level since July 2024, on Thursday. The dollar recently traded at 157.13 yen on Friday in Tokyo.
While Finance Minister Satsuki Katayama didn't explicitly mention intervention, she said she is closely monitoring foreign-exchange moves, including on her smartphone.
"The time is finally approaching to take the decisive action we have consistently signaled," Katayama said Thursday.
Japan's top currency diplomat Atsushi Mimura, speaking shortly after Katayama, echoed her comments, calling it "the final evacuation warning."
Some media reported that Japanese authorities intervened in the foreign-exchange market to support the yen.
The Middle East conflict has disrupted supply of energy and pushed up oil prices, raising concerns it could slow global economic growth.
Currency traders have been selling currencies of countries such as Japan that are highly exposed to rising energy prices.
In Japan, a weak yen risks driving up inflation and weighing consumer spending, as the nation relies heavily on imports of goods such as energy and food.
Higher crude oil prices are likely to widen Japan's trade deficit.
Intervention could help steady the yen by buying the same amount of additional yen to be spent for the purchases of goods from abroad, said SMBC Nikko Securities chief foreign-exchange strategist Makoto Noji.
"That will also likely prompt speculators to buy back yen," he said.
Still, the yen's downward bias, driven by higher energy import costs and concerns about the economy, shows no signs of changing, said Mizuho Securities economist Yusuke Matsuo.
As long as tensions in the Middle East persist, the economic environment remains conducive to a weaker yen, he said.
"Doubts remain as to whether any foreign exchange intervention can have a lasting effect," he adds.
--Megumi Fujikawa contributed to this article.
Write to Kosaku Narioka at kosaku.narioka@wsj.com
(END) Dow Jones Newswires
04-30-26 2242ET
