Japanese Yen hits 40‑year low against the dollar, sparking intervention talks

The Japanese yen fell to around 162 yen per U.S. dollar, the weakest level since 1986, after a sharp strengthening of the dollar and widening interest‑rate differentials. Finance Minister Satsuki Katayama said the government is ready to act against “excessive” moves, echoing earlier statements that authorities could intervene if needed.

Japan’s central bank recently raised its policy rate to 1 %, the highest in three decades, but the gap with U.S. rates remains large, fueling carry‑trade flows that keep pressure on the yen. In April‑May the government spent about 11.7 trillion yen (≈ $72 billion) buying its currency, a move that only provided temporary relief.

Analysts note the 162‑level has become a psychological ceiling and that a further slide toward 165 yen could trigger another intervention, though such action may have limited impact. The yen’s weakness benefits exporters while raising import costs for households, and some observers warn that repeated interventions could force Japan to sell U.S. Treasury holdings, affecting global bond markets.