U.S. Treasury flags yen volatility, Japan readies intervention

The U.S. Treasury Department’s semi‑annual report released in July described excessive fluctuations in the Japanese yen as “undesirable.” The report noted that the yen had risen nearly 10% against the dollar by early 2025 before weakening to a near‑flat position by year‑end, and that Japan had not conducted any yen‑buying, dollar‑selling intervention during the covered period. The Treasury highlighted limited transparency from China and placed ten economies, including Japan, China and South Korea, on its foreign‑exchange monitoring list.

Following the Treasury’s assessment, Japan’s finance minister, Shunichi Katayama, said Tokyo remains prepared to take decisive action in the foreign‑exchange market. He cited the joint U.S.–Japan statement referenced in the Treasury report and affirmed round‑the‑clock communication between the two governments. While Katayama declined to specify any exact exchange‑rate levels that would trigger intervention, he stressed that Japan is ready to respond to any excessive yen moves, especially as the currency sits near a 40‑year low against the dollar.