Level 160 "Melee Battle": Japanese finance minister issues intervention warning, triggering a currency market storm by the Federal Reserve's "no rate cut" stance.

The Japanese Finance Minister stated that the authorities are fully prepared to take action on exchange rate fluctuations when necessary. At this time, traders are testing the upside potential of the US dollar against the Japanese yen before the Bank of Japan announces its policy decision later that day. "We are maintaining an extremely high sense of urgency," Finance Minister Mina Masahime said at a press conference after a cabinet meeting on Thursday. "Considering the impact of exchange rates on people's lives, we are ready to respond fully at any time," she said. Masahime added: "Today is a day when speculators are more likely to act, as we are about to have a press conference from the Governor of the Bank of Japan, a meeting between US and Japanese leaders, and uncertainty in the Middle East." After her speech, the yen stabilized against the dollar at around 159.80; earlier hours, the yen had slipped to 159.90. In 2024, when the yen devalued beyond the 160 mark, the Japanese authorities had intervened multiple times to support their currency. Masahime's remarks came hours before the Bank of Japan announced its latest policy decision. The market generally expected the bank to maintain its benchmark interest rate, with the focus on Governor Haruhiko Kuroda's press conference for clues on the interest rate path. After explaining the past decision to keep interest rates unchanged, Kuroda's comments were sometimes considered dovish, leading to a weakening of the yen. Following the January Bank of Japan meeting, the US carried out a "currency review" in coordination with Japanese authorities, which clearly demonstrated coordinated action. These measures triggered a rebound in the yen, eventually strengthening the yen against the dollar by about 7 yen. Earlier that day, the yen fell to 159.90, its lowest level since July 2024. Prior to that, Federal Reserve Chair Powell stated that the US central bank would hold off on further rate cuts until there are clearer signs of easing inflation. Meanwhile, oil prices also rose after Iran and Israel exchanged strikes on major energy facilities in the Middle East. The rise in oil prices, along with the weakening yen, has heightened concerns in Japan about the possibility of "stagflation," which could lead to increased fiscal spending and make the central bank's path towards tightening more complicated. Overnight index swap (OIS) indicates that traders believe there is about a 58% chance of a rate hike in April.