Japanese authorities are closely monitoring the recent decline of the yen and are prepared to intervene in the currency market if necessary.
Satsuki Katayama, acting chairperson of the Liberal Democratic Party's policy research council, stated that the recent volatility in the yen is excessive and out of line with fundamentals. She believes that Japan would not face any criticism if it were to intervene in the market to prop up the yen.
Katayama also suggested that the Bank of Japan should not rush into raising interest rates again given the uncertainty over the global economic outlook.
The dollar has been rallying against the yen in recent weeks, driven by receding market expectations of a near-term U.S. interest rate cut. This has pushed the yen to a 34-year low, heightening the chance of currency intervention by Japanese authorities.
The dollar currently stands at 154.85 yen, approaching the 155 level that is seen by traders as Tokyo's line-in-the-sand that could prompt it to step into the market.