Japan's Finance Minister Katayama Satsuki said the government will take decisive action to stabilize the yen if necessary following a sharp decline in the currency's value [1].

The potential for market intervention comes as Japan struggles to maintain currency stability amid geopolitical volatility, which impacts import costs and national inflation.

During a press conference on June 30, 2026, Katayama said the government is prepared to act to curb excessive volatility [3]. She said, "If necessary, we will take appropriate and decisive action at any time" [1].

The Japanese yen recently plummeted to a level not seen in approximately 40 years [1]. Reports on the exact valuation vary slightly, with some sources placing the yen in the 163 range [1], and others citing the 162 range [3] per U.S. dollar.

Katayama said the currency's weakness was due to a "risk-off" surge in dollar buying triggered by deteriorating conditions in the Middle East. She said that the sudden escalation of tensions between the U.S. and Iran was not predicted by global markets, creating a difficult environment for the Japanese economy [1].

Despite the volatility, Katayama said that the government's fundamental policy remains unchanged [1]. This stance was echoed by Chief Cabinet Secretary Minoru Kihara, who said, "Our policy does not change at all" [1].

The government's willingness to intervene typically involves selling U.S. dollars and buying yen to artificially boost the currency's value. Such moves are often preceded by verbal warnings, known as "jawboning," to discourage speculators from betting against the yen [1].

Japan has faced repeated pressure on its currency as the gap between Japanese interest rates and those of other major economies persists. The current slide toward 163 yen per dollar represents a significant challenge for the Ministry of Finance in its effort to prevent a disorderly spiral of depreciation [1].

“"If necessary, we will take appropriate and decisive action at any time."”

The threat of currency intervention signals that the Japanese government views the current yen depreciation as a threat to economic stability rather than a natural market adjustment. By linking the currency drop to Middle East tensions and US-Iran relations, Japan is highlighting how external geopolitical shocks can amplify domestic economic vulnerabilities. If verbal warnings fail to stabilize the exchange rate, a direct market intervention may be the only remaining tool to prevent further erosion of the yen's purchasing power.