During the Asian trading session on November 2, the dollar/yen pair hovered around 157.80, with the yen edging lower. The previous day, Japanese Finance Minister Satsuki Katayama said the earlier Japan-U.S. joint statement on foreign exchange remained in force, adding that Tokyo would continue to monitor the currency market and take necessary action in the event of disorderly volatility. She declined to comment on the yen’s current level and did not identify a specific threshold that could trigger intervention.
Markets interpreted the remarks as a sign that Japanese authorities were keeping intervention options open while avoiding any indication that they were ready to enter the market immediately. Katayama said market conditions had improved compared with the earlier phase when the dollar/yen pair broke above 160, but the government still stressed that exchange rates should not experience excessive volatility. With no clearly defined red line, traders were more inclined to view the comments as a warning against a rapid yen depreciation.
The yen’s move has also attracted attention from Japan’s political leadership. Prime Minister Sanae Takaichi had previously said that an undervalued yen was a concern worth monitoring. Katayama’s reference to the Japan-U.S. joint statement was also seen as Tokyo reaffirming its commitment to coordinating exchange-rate policy, particularly amid external political factors such as U.S. midterm elections that could disrupt global currency markets. Japan emphasized that communication with the United States on exchange-rate policy objectives would continue.
Exchange-rate pressure is beginning to feed through to the real economy. A latest survey showed Japan’s manufacturing purchasing managers’ index fell to 53.3 in October from 54.1 in September, the lowest reading in seven months. Manufacturing remained in expansion territory, but growth in output and new orders slowed, while rising prices for crude oil, raw materials and components lifted input costs. For Japan’s economy, which depends on energy and raw-material imports, a weaker yen amplifies import-cost pressure and may affect households through higher commodity prices.
Fiscal policy has also become a focus for market observers. Katayama said the government would improve the accuracy and transparency of tax-revenue forecasts to strengthen budget formulation and information disclosure. Japan’s parliament is discussing proposals that include a lower consumption tax on food and income-linked subsidies for low-income workers. The measures are intended to ease cost-of-living pressures but have also made investors more attentive to their implications for fiscal revenue, government spending and long-term debt sustainability.
