The Bank of Japan's "cautious rate hikes" lead to a fall in the Japanese yen, prompting the highest foreign exchange official in Japan to issue a "intervention warning.

Following the interest rate decision by the Bank of Japan last Friday, which led to the weakening of the yen against the dollar, Japan's chief currency official has issued a warning regarding recent fluctuations in the foreign exchange market. Japan's top foreign exchange diplomat Atsushi Mimura stated, "Especially after last week's monetary policy meeting, we have seen one-sided, sudden fluctuations in the market. I am deeply concerned about this, and we hope to take appropriate measures to address this excessive volatility." After the Bank of Japan announced a rate hike last Friday, Bank of Japan Governor Haruhiko Kuroda chose to maintain policy flexibility and did not send out overly hawkish signals to boost the yen. This led to the yen dropping to 157.78 against the dollar over the weekend, indicating that investors were disappointed that the Bank of Japan did not signal a stronger rate hike. On Monday, after Atsushi Mimura's comments, the yen strengthened to 157.51 against the dollar. Analysts widely expect the Bank of Japan to keep rates unchanged for the next six months before the next rate hike. If the yen continues to weaken against the dollar to the 160 level, the Japanese Ministry of Finance may have to intervene in the foreign exchange market.