Dollar hits 159.94 yen as Japan warns against rapid currency moves
Key Facts
The dollar rose to 159.94 yen early Thursday, November 12, its strongest level in more than two months, according to Reuters. The rise came as Atsushi Mimura, Japan’s vice finance minister for international affairs, warned about the pace of currency moves. Mimura said recent moves "have been excessively rapid." He added that "it is too early to forget what happened this summer," referring to Japan’s yen-buying interventions.
The warning comes against the backdrop of Japan’s yen purchases over the summer, including a joint operation with the United States, according to Reuters. Mimura drew on that experience when he said it was still too early to forget what happened. The dollar’s rise to 159.94 yen leaves the Japanese currency at its weakest level in more than two months, the report said. Later on Thursday, the yen fell 0.13% to 159.975 per dollar, its lowest level since September. Reuters linked the currency’s move to rising expectations of Federal Reserve tightening, while the prospect of a Bank of Japan rate hike remained in focus.
The yen’s weakness coincided with Japanese wholesale price inflation accelerating to 7.1% year on year in October, from 6.8% in September, according to Reuters. The increase reinforced expectations that the Bank of Japan could raise interest rates as soon as the following month. But a summary of opinions from the bank’s October meeting showed differing views on the policy path. One view held that it was appropriate to continue raising the interest rate while responding to developments in economic activity, prices and financial conditions. Another view held that the neutral interest rate is much higher than 1%.
The Bank of Japan summary also addressed some of the potential effects of the next rate increase on parts of the economy. It said a rate hike could somewhat restrain corporate fixed investment and residential investment. The effect of an increase on private consumption could be positive or negative, according to the summary. This balancing of considerations comes as bank members differ on when to continue tightening. Inflation and wholesale price data remain part of the context markets are monitoring as they assess the bank’s next move.
In the United States, Federal Reserve Board member Christopher Waller said core personal consumption expenditures inflation was 3.1% year on year in September. He added that more than 70% of core services price components recorded annual increases above 3% in the same month. Waller said he would support a 25-basis-point rate hike at the December meeting if inflation data improve compared with September. The remarks put the U.S. policy path among the factors watched by currency markets, alongside the Japanese debate over a rate hike. The Federal Reserve meets on December 8 and 9, while the Bank of Japan holds its next meeting on December 17 and 18, 2026.