After the violent fluctuations of the Japanese yen, Japan's finance minister claimed to closely monitor the exchange rate, leading the market to speculate on whether intervention has been implemented.

Japanese Finance Minister Kaoru Kagemitsu stated on Friday that the Japanese authorities are closely monitoring exchange rate movements with a sense of urgency. However, the market is still puzzled by the sharp fluctuations of the yen earlier that day. Kagemitsu told reporters at the Ministry of Finance, "We are constantly monitoring with a sense of urgency." She refused to answer questions about whether the authorities intervened in the market. The yen experienced dramatic fluctuations when Bank of Japan Governor Kaito Ueda concluded his press conference. Earlier that day, the Bank of Japan Policy Board made a widely expected decision to keep the benchmark interest rate unchanged. Minutes after Ueda finished speaking, the yen against the dollar briefly dropped to 159.23, then quickly rebounded to 157.37. After Kagemitsu's remarks, the yen gave back some gains, trading at 157.97. Jun Mimura, the top official in charge of exchange rate affairs, told reporters that he currently has no comment on whether the government intervened to support the yen in the market. He also did not comment on whether a rate check was conducted. In 2024, when the yen fell below the 160 level, the authorities intervened four times at a cost of nearly $100 billion to buy yen. This action served as a rough reference point for market participants, indicating when the Ministry of Finance might intervene again. Officials stated that they did not set a specific level in mind when intervening, but rather took action to address sudden, disorderly, or speculative fluctuations. Economist Taro Kimura said, "Ueda mixed hawkish and dovish signals to maintain flexibility for the next rate hike. He emphasized the risk of yen weakness pushing up inflation expectations by raising import prices." Japanese markets have been tense this week due to Prime Minister Sanae Takii's promise to suspend the 8% consumption tax on food and non-alcoholic beverages for two years if she and her ruling Liberal Democratic Party win the snap election on February 8. Concerns about the government's expanding expenditure possibly exacerbating Japan's debt burden (Japan has the largest debt size among advanced economies) have pushed the yield on Japan's 40-year government bonds to record highs earlier this week. These concerns have also weighed on the yen's performance.