Japan's Finance Minister warns: The recent sharp depreciation of the yen has triggered the risk of volatility in the foreign exchange market

🗓️Release date: October 8, 2025 (Tokyo time)

Author: BrokerHiveX Financial Editorial Department

1. Latest Developments: The Japanese Yen hits a two-month low, triggering official warnings

On October 7, 2025, Japanese Finance Minister Shunichi Suzuki held a press conference in Tokyo, warning that the foreign exchange market has been "excessively volatile" recently and that the government will closely monitor exchange rate fluctuations and take intervention measures if necessary.
The yen exchange rate against the US dollar fell to 150.62 yen/dollar , the lowest point in nearly two months; the exchange rate against the euro hit 176.35 yen/euro , a record high.

“The exchange rate should reflect economic fundamentals and should not experience irrational fluctuations. The government will remain highly vigilant.”
—Katsunobu Kato, Japanese Finance Minister

The market generally believes that the Japanese government's statement is laying the groundwork for potential foreign exchange market intervention . Previously, the Bank of Japan has repeatedly stated that it will maintain its ultra-loose policy, and this "policy divergence" is driving continued pressure on the yen.

2. Three core reasons for the depreciation of the Japanese yen

Economists point out that if the United States delays its interest rate cut, Japan's policy space will be further limited, which may cause the yen to continue to weaken in the coming weeks.

3. Market reaction: Investors bet on the psychological barrier of "151"

• The Tokyo Stock Exchange (TSE) index fell slightly by 0.5% after the exchange rate news was released, with export companies performing relatively resiliently.

• The US dollar index (DXY) rose to 106.8, indicating that funds are still flowing into US dollar assets.

• Several investment banks (such as Morgan Stanley, UBS, and Nomura) predict that if the yen breaks through the 151 mark, the Bank of Japan may intervene through "verbal intervention" or directly enter the market.

Bloomberg reported that Japan's Ministry of Finance has been in communication with major banks and will take "coordinated intervention" if necessary.

IV. Impact on the Global Market

1️⃣Forex traders: Volatility brings both opportunities and risks

High volatility means more short-term trading opportunities, but also greater risks. Many forex brokers (such as OANDA , IG , and Pepperstone ) have reminded clients to set stop-loss orders and margin protection.

2️⃣Import and export companies: differentiated profit structures

• Exporting companies (such as Toyota and Sony) benefit from the devaluation and their export competitiveness is enhanced.

• Importing companies (especially those in the energy and chemical industries) are facing pressure from rising costs.

3️⃣Global inflation chain: Japan's imported inflation may rise

The weakening of the yen will push up the prices of imported goods, or indirectly affect Japan's CPI, putting the Bank of Japan in a policy dilemma.

V. Investment and Risk Warning

VI. Conclusion: The Japanese Yen may enter a "structural weakness cycle"

Despite the Japanese government's intervention signals, the yen's weakness is unlikely to be reversed until monetary policy is tightened. Analysts generally believe that unless the Bank of Japan changes its yield curve control (YCC) policy, the yen is likely to remain in the 145-155 range for a long time.

In the coming weeks, the market focus will be on the following three directions:

• Whether the Federal Reserve will delay its interest rate cut plans;

• Whether the Bank of Japan will adjust the wording of its policy statement;

• Whether there is substantial foreign exchange intervention.