The yen strengthened by 0.3% against the dollar to trade near ¥159.8 in Tokyo after Japan's top currency official, Vice Finance Minister Atsushi Mimura, warned decisive government action might be imminent. Mimura's comments, seen as a final warning, triggered a brief rally from ¥160.30, its weakest level since 2024. However, the yen later weakened slightly.

Mimura stated the government 'stands ready to respond on all fronts', while Bank of Japan Governor Kazuo Ueda confirmed the central bank is 'scrutinising how currency moves could affect' growth and price forecasts. Traders anticipate continued volatility, with Nomura's Yujiro Goto warning intervention this week remains a risk despite BoJ rate hold doubts. The yen's weakness is partly driven by Middle East conflict risks and crude oil speculation, challenging Japan's efforts to shield households from soaring energy costs. ¥159.8 marks a critical threshold, echoing phrases used before past interventions in 2022 and 2024.