Yen strengthens as US and Japan flag undervaluation concerns
USD/JPY fell to 157.00 from 157.75 after Japanese and US officials repeated concerns about yen weakness. Japanese officials disclosed that Trump raised the issue with Takaichi at the UN and that Katayama and Bessent reaffirmed the problem of yen undervaluation. The article notes that intervention and verbal warnings may only buy time while the interest-rate gap remains wide.
The yen’s move followed fresh comments from Tokyo and Washington describing its weakness as a concern. USD/JPY slipped to 157.00 from 157.75. Japanese officials said Trump had raised the issue with Takaichi at the UN, while Katayama and Bessent restated that the yen was undervalued.
A July 31 joint intervention had pushed the pair from 163.73 to the mid-150s. Since then, the wide interest-rate gap has kept rewarding yen-funded positions, and a recent BOJ hike to 1.25% did little to reverse the trend. Warnings and intervention may therefore delay, rather than necessarily stop, renewed weakness.
A weaker yen could raise import costs for Japanese households and businesses, while exporters may gain from more competitive pricing abroad. Across the Asia-Pacific, currency swings may influence trade, travel, and capital flows. If verbal warnings fade without a narrower rate gap, consumers and firms could face continued uncertainty over prices, overseas purchases, and cross-border investment.