The Japanese yen has reached its weakest point against the U.S. dollar in four decades, falling as much as 0.5 percent to 163.24 per dollar overnight as the greenback strengthened. The currency has decreased by one-third over five years, and a broader gauge of its strength is sending an equally worrying signal for Japan.
Fiscal concerns and the interest rate gap between Japan and the United States continue to weigh on the currency. The U.S. Treasury Department noted that yen weakness has persisted despite the narrowing of U.S.-Japan interest rate differentials, warning that excess volatility in the currency is undesirable.
Minister of Finance Satsuki Katayama stated that Japanese financial authorities are ready to take action in the currency market if necessary. However, these comments did little to support the beleaguered yen.