Japanese yen slides to 40‑year low near 163 per dollar

The yen weakened to around ¥163 per U.S. dollar, the weakest level since December 1986, marking a 39‑year historic low. Finance Minister Satsuki Katayama said the government stands ready to intervene in the foreign‑exchange market “if necessary,” echoing earlier warnings during the Golden Week intervention that briefly lifted the yen to ¥155.

The Bank of Japan, which lifted its policy rate to 1 % in June – the highest in 31 years – signalled it may raise rates further to curb inflation that has hovered near its 2 % target. The U.S. Treasury Department warned that excessive yen volatility is undesirable and called for additional BOJ rate hikes, noting the yen has fallen 51 % in real terms since 2011.

Factors driving the slide include heightened Middle‑East tensions boosting dollar demand, rising oil prices, Japan’s trade‑deficit worries and fiscal‑expansion plans under Prime Minister Sanae Takaichi. Market participants remain alert for a possible surprise intervention, but previous moves have had only temporary effects.