Japan steps up yen intervention threats, signals rate-hike chance

TOKYO, March 30 : Japan stepped up yen intervention threats and signalled that further falls in the currency could justify a near-term interest rate hike, as policymakers grow increasingly concerned about inflationary pressures from the Middle East war. In the strongest warning yet of yen-buying intervention, Japan's top currency diplomat Atsushi Mimura said on Monday authorities may need to take 'decisive' steps if speculative moves persist in the currency market. Markets have been rattled this month after the Iran war effectively shut the Strait of Hormuz, a chokepoint for about a fifth of global oil and gas flows, driving up crude oil prices and demand for the safe-haven dollar. The yen bore the brunt and slid past the psychologically important 160-per-dollar level to its weakest since July 2024, when Japan last intervened to prop up the currency. Bank of Japan Governor Kazuo Ueda said the central bank would closely watch yen moves as they affect the economy and prices, suggesting inflationary pressures from a weak currency could justify raising interest rates in the coming months.