FX.co ★ Yen Slides Toward 40-Year Low

The Japanese yen weakened to around 161.5 per dollar on Monday, hovering near its lowest level since 1986, as repeated verbal interventions from Tokyo failed to stem its decline. Finance Minister Satsuki Katayama reiterated that authorities stand ready to take appropriate action against excessive currency movements at any time, echoing earlier warnings. The yen has now given up all the gains it made on April 30, when officials conducted a record-sized market intervention to shore up the currency. The latest slide came despite the Bank of Japan’s continued policy normalization, including a 25-basis-point interest rate hike to 1% last week. The yen also remained under pressure from robust carry-trade activity, as investors continued to favor short yen positions amid the still-wide interest rate differential between Japan and the United States.