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TOKYO — Japan's finance minister said Tuesday that authorities were ready to take "appropriate action" after the yen hit around 40-year low against the dollar.
The currency has been sliding for years and has come under renewed pressure because of the Middle East war and the gap in US and Japanese interest rates.
Satsuki Katayama said Japan "will take appropriate action at any time as necessary", local media reported.
The comment was intended to signal to the markets that Japan was prepared to intervene to support the currency after spending more than $70 billion doing so last month.
The yen sank past 161.96 per dollar in London trade on Monday for the first time since 1986.
It hit 162.40 in Asian trade Tuesday before recovering to 162.17.
A weak yen makes imports more expensive for resource-poor Japan, notably for dollar-traded oil.
Prime Minister Sanae Takaichi's government has been shielding consumers with heavy fuel and energy subsidies.
But the weak yen has also helped fuel a boom in tourism, since it makes shopping, accommodation and food cheaper for foreign tourists.
The Bank of Japan this month raised interest rates to a 31-year high but there are expectations that the US Federal Reserve could also raise borrowing costs this year, meaning that the interest-rate gap is likely to remain wide.
Further hikes by the BoJ could also meet resistance from Takaichi's government, which is anxious not to snuff out growth with high borrowing costs.
Japan's currency authorities did not intervene in the foreign exchange market between May 28 and June 26, finance ministry data showed late on Tuesday.
