Yen Falls Further Even as Katayama, Bessent Share Concerns

Currency Movement - The yen has fallen to its weakest level in 18 months, reaching 159.05 per dollar, a decline of up to 0.6% [2][3] - The depreciation of the yen is attributed to political developments, including Prime Minister Sanae Takaichi's intention to call a snap election, reviving the "Takaichi trade" [2] Government Response - Japanese Finance Minister Satsuki Katayama expressed concerns about the yen's one-way weakening during a meeting with US Treasury Secretary Scott Bessent, who shares these concerns [3][4] - There is speculation that the meeting may lead to potential currency intervention, as both nations will maintain close communication regarding currency developments [4][5] Market Reactions - The weaker yen is expected to benefit Japan's largest exporters, contributing to a record high in the stock index [6] - However, the broader business community, represented by Keidanren, is increasingly worried about the yen's decline and calls for an adjustment towards a stronger yen [6][7] Intervention Considerations - The risk of currency intervention is being highlighted, with the yen at 160 against the dollar seen as a critical threshold for potential action [5][7] - Historical context indicates that Japanese authorities intervened in the market four times in 2024 when the yen traded around 160, suggesting a reference point for future interventions [7]