Yen climbs over 1% as Japanese leaders flag concerns over weak currency

Japanese leaders raised the issue of a weak yen during discussions with U.S. counterparts, leading the currency to surge up to 1.2% and reach 156.94 per dollar, its best performance in nearly three weeks. Prime Minister Sanae Takaichi described an undervalued yen as problematic, while Treasury Secretary Scott Bessent spoke with Finance Minister Satsuki Katayama about the desirability of a stronger yen. Market strategists noted that the comments could act as a ceiling on further weakness and signal deeper coordination between the two governments.

The yen’s recent slide was driven by expectations of additional Federal Reserve rate hikes and doubts about how quickly the Bank of Japan can tighten policy, pushing it toward the 160-per-dollar threshold where intervention risk rises. Options sentiment has turned more bullish, and leveraged traders reduced their long yen positions after a period of net buying. Japan previously intervened heavily this summer, spending a record 15.4 trillion yen through August 26.