The yen hovered near a 40-year low against the US dollar on Tuesday after Japan’s finance minister said Tokyo was ready to take “resolute measures” when needed.
Finance Minister Satsuki Katayama made the remarks after speaking with US Treasury Secretary Scott Bessent, according to the Japanese government.
The Katayama-Bessent exchange helped the yen recover from 161.93 per dollar. That level was just short of 161.96, last seen in December 1996.
The yen traded around 161.60 per dollar during Tuesday afternoon trade in Tokyo. Japanese authorities spent more than USD 70 billion last month supporting the currency as it weakened against the dollar.
The yen has come under pressure from the gap between US and Japanese interest rates and the Middle East war. The Bank of Japan raised rates last week to a 31-year high.
MUFG analyst Michael Wan said a durable shift would require changes in the fundamentals, including low real interest rates, compared with the United States.
Wan said the Bank of Japan likely needed to signal a more hawkish path to reassure markets that more rate increases could follow.
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The US Federal Reserve also indicated last week that it could raise borrowing costs this year. A weak yen makes imports more expensive for resource-poor Japan, especially oil priced in dollars. It has also supported tourism by making shopping, accommodation and food cheaper for foreign visitors.
Major Global Stock Index Performance
| Region / Exchange | Index Name | Current Value | Market Movement |
| Tokyo, Japan | Nikkei 225 | 71,548.12 | Down 1.1% |
| Seoul, South Korea | Kospi | 8,809.27 | Down 3.4% |
| Shanghai, China | Composite | 4,149.51 | Down 0.3% |
| New York, United States | Dow Jones | 51,712.71 | Up 0.3% (Close) |
| London, United Kingdom | FTSE 100 | 10,437.85 | Up 0.7% (Close) |
| Hong Kong | Hang Seng Index | 23,761.34 | Flat |
