Japan's Digital Minister Taro Kono clarified that he is not directly requesting the Bank of Japan (BoJ) to raise rates now.
“Monetary policy decision is up to BoJ,” he added.
Responding to Kono’s comments, Finance Minister Shunichi Suzuki said he “hopes that politicians should be mindful about commenting on market-related comments due to their impact.”
Additional comments
Also will attend G7 meetings to be held on the sidelines of G20 meetings.
Plan to discuss various topics including world economy and currency at G20.
Meanwhile, Japan’s private sector economic council members said that they cant overlook the weak Yen negative effects.
The country’s Prime Minister Fumio Kishida also came out on the wires to warn about the impact on inflation due to the Yen depreciation.
He said that the “government must be vigilant about the impact of rising prices, driven in part by a weak Yen, on the economy to achieve domestic-demand driven recovery.”
Need to be cautious about effects of rising prices due to weak Yen,” PM Kishida warned.
Market reaction
USD/JPY has edged a tad lower following these comments, currently trading near 157.35, almost unchanged on the day.
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The current BoJ ultra-loose monetary policy, based on massive stimulus to the economy, has caused the Yen to depreciate against its main currency peers. This process has exacerbated more recently due to an increasing policy divergence between the Bank of Japan and other main central banks, which have opted to increase interest rates sharply to fight decades-high levels of inflation.
The BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supports a widening of the differential between the 10-year US and Japanese bonds, which favors the US Dollar against the Japanese Yen.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to strong gains near 1.1100 despite upbeat US data
EUR/USD trades at its highest level since early October slightly above 1.1100 in the second half of the day on Thursday. Despite the upbeat Jobless Claims data from the US, the US Dollar (USD) stays under persistent selling pressure as the Trump administration's tariff announcements feed into stagflation fears.
GBP/USD extends rally, closes in on 1.3200
GBP/USD preserves its bullish momentum and advances toward 1.3200 in the American session. The US Dollar (USD) struggles to find demand despite the better-than-expected Initial Jobless Claims data, as investors grow increasingly worried about an economic downturn on the new trade regime.
Gold slumps below $3,100 as correction from record-high picks up steam
Gold's correction from the all-time peak set at $3,167 deepens after the drop below the $3,100 mark. The precious metal struggles to capitalize on risk-aversion after US President Donald Trump's tariff decisions as investors assess a potentially worsening demand outlook.
SOL is the winner as Solana chain turns into battleground for meme coin launchpad and DEX
Solana (SOL) gains nearly 2% in the last 24 hours and trades at 118.28 at the time of writing on Thursday. A Decentralized Exchange (DEX) and a meme coin launchpad built on the Solana blockchain have waged a war for users and compete for the trade volume on the chain.
Trump’s “Liberation Day” tariffs on the way
United States (US) President Donald Trump’s self-styled “Liberation Day” has finally arrived. After four straight failures to kick off Donald Trump’s “day one” tariffs that were supposed to be implemented when President Trump assumed office 72 days ago, Trump’s team is slated to finally unveil a sweeping, lopsided package of “reciprocal” tariffs.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.