Yen Nears 39-Year Low as U.S. and Japanese Finance Ministers Hold Late-Night Meeting

On June 22 (local time), the yen-dollar exchange rate on the New York foreign exchange market dropped to as low as 161.93 yen per dollar at one point, reaching its lowest level in about two years. This has led to speculation that U.S. and Japanese financial authorities are discussing potential intervention in the foreign exchange market.

According to reports from the Nikkei and other sources on June 23, at around 10 a.m. Eastern Time on June 22 (11 p.m. Japan time), the dollar-yen exchange rate in the New York foreign exchange market stood at 161.93 yen per dollar. This marks the lowest level since July 2024 (161.96 yen), and if it falls below this, it would be the lowest since December 1986—a 39-year low. However, about an hour later, the exchange rate rebounded to 161.08 yen per dollar.

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The Nikkei reported that during this period, Japanese Finance Minister Satsuki Katayama and U.S. Treasury Secretary Scott Bessent held an online meeting. News that the U.S. and Japanese finance ministers were discussing the exchange rate in a late-night session reportedly tempered the rapid weakening of the yen. Some in the market speculated that the Japanese government and the Bank of Japan (BOJ) may have conducted a small-scale yen-buying intervention or carried out a "rate check" during this time. Heightened vigilance over potential intervention in the foreign exchange market has put the brakes on the yen's weakening trend.

However, Finance Minister Katayama stated at a press conference on June 23 that the discussion with Secretary Bessent was not urgent, and that they also discussed the situation in Iran and cooperation on artificial intelligence (AI) in addition to financial market trends. Regarding foreign exchange intervention, he said, "In accordance with the joint statement by the U.S. and Japanese finance ministers announced in September last year, our stance remains unchanged that we will take decisive measures if necessary, and both countries share a very close understanding."

The Nikkei pointed out that the 161.96 yen per dollar level recorded in July 2024 is effectively seen as a "defense line" by Japanese authorities. If this level is breached, the value of the yen will fall to its lowest since the Plaza Accord in December 1986. If that level is reached, it will become difficult to predict how far the yen's weakness might continue.

However, the outlet explained that the recent weakness of the yen is mainly due to the strong dollar stemming from expectations of U.S. interest rate hikes, and it is difficult to attribute the weakness solely to speculative yen selling. As a result, even if the Japanese government and BOJ actually intervene to buy yen, the effect is expected to be limited.

According to Investing.com, as of around 1:45 p.m. on this day, the dollar-yen exchange rate was moving in the 161.6 yen range.

This content was produced with the assistance of AI translation services.