Overview
- The yen strengthened to around 156.4 per dollar after officials delivered their strongest warnings yet against “one-sided” moves, trimming losses from last week’s slide.
- Finance chief Satsuki Katayama and top FX diplomat Atsushi Mimura said authorities stand ready to take “appropriate actions,” with traders treating the remarks as a clear intervention threat.
- Japan’s 10-year government bond yield climbed near 2.1%, a 27-year high, as investors priced fiscal risks from larger budgets and potential additional debt issuance.
- Markets are watching the ¥160 level in dollar/yen as a possible trigger area, recalling roughly US$100 billion of yen-buying operations around similar levels last year.
- The BOJ lifted rates to 0.75% but kept guidance cautious; analysts see scope for further hikes as soon as April, while negative real rates, carry trades and thin holiday liquidity keep the currency vulnerable.