Currency Market Overview - The yen received support as Japanese officials increased verbal intervention to address its decline, while the dollar is on track for its largest weekly rise in six weeks [1][2] - The yen rose 0.4% to 156.82 per dollar, although it remained near a 10-month low of 157.90 and is expected to lose 1.5% for the week [2] - The yen has fallen approximately 6% since Prime Minister Sanae Takaichi's election on October 4, with concerns over Japan's fiscal position due to her spending policies [3] Government Intervention - Japanese Finance Minister Satsuki Katayama indicated that intervention is a possibility to manage excessive volatility, which has heightened trader alertness for potential yen buying [1][2] - The last significant intervention by Tokyo involved spending 5.53 trillion yen (nearly $37 billion) in July 2024 to stabilize the yen from 38-year lows [4] Economic Stimulus - Takaichi's cabinet approved a substantial economic stimulus package of 21.3 trillion yen ($135.4 billion), aimed at bolstering the economy [3] Broader Market Context - The dollar is set for a weekly gain, with mixed signals regarding potential Federal Reserve rate cuts, influenced by a delayed U.S. nonfarm payrolls report [6] - New York Fed President John Williams suggested that the central bank could still consider rate cuts in the near term, which has led to increased market speculation about a rate cut next month [7]

Core Points - The United States and South Korea agreed that foreign exchange interventions should be reserved for combating excessive volatility, without targeting exchange rates for competitive purposes [1][3][6] - The agreement aligns with a similar one made between the U.S. and Japan, but does not include a bilateral currency swap line requested by South Korea [2][4] - South Korea emphasized the importance of monitoring currency market stability, a point not included in Japan's agreement [4] Summary by Sections Foreign Exchange Interventions - The joint statement specifies that market intervention should only be used to address excessive volatility and disorderly movements in exchange rates [6] - Both countries reaffirmed their commitment under the IMF Articles of Agreement to avoid manipulating exchange rates for competitive advantages [3] Bilateral Relations - The agreement does not include a bilateral currency swap line, which South Korea sought to manage the foreign exchange implications of a $350 billion investment package [2] - South Korea will share its market intervention operations with the U.S. on a monthly basis, with public disclosures occurring quarterly [6] National Pension Service Concerns - The statement did not explicitly mention South Korea's National Pension Service (NPS), which has raised concerns regarding its foreign asset increases and potential currency intervention implications [5]