The yen has once again fallen below the 160 mark! Japan's finance minister says: will "join forces" with the U.S. Treasury to address one-sided volatility.

Japanese Finance Minister Satsuki Katayama said that after the yen briefly fell below a key threshold, ministry officials will continue to work closely with their counterparts in Washington and take appropriate action against one-sided, rapid moves in the foreign exchange market when necessary. Speaking to reporters on Friday, Katayama said, "What we are seeing now is sharp, one-sided moves in the foreign exchange market," and "we will continue to work closely with the U.S. Treasury and respond appropriately." Katayama's remarks came after the yen briefly fell below the key psychological level of 160 per dollar during New York trading hours on Thursday. The breach once again fueled speculation that Tokyo may intervene in the currency market multiple times, as it did earlier this year, to support the local currency. The yen has been under pressure from the large interest rate differential between the United States and Japan the Bank of Japan's benchmark rate is 1.25%, more than 2.5 percentage points below the Federal Reserve's. Katayama reiterated that Japan and the United States remain aligned on exchange rate issues, noting that U.S. Treasury Secretary Scott Bessent has repeatedly expressed a preference for a strong yen that reflects economic fundamentals. She said the two countries' leaders shared that view at their summit. Katayama also said she does not believe there is a problem with the difference in the amounts used by Japan and the United States during their joint intervention on July 31. The U.S. side disclosed that the New York Fed bought 79.4 billion yen in the spot market by selling euros, while Japan's purchases exceeded 5.5 trillion yen. Separately, Katayama said it is too early to comment on defense spending plans. This followed Japanese media reports that the government may consider compiling a five-year budget of 50 trillion to 60 trillion yen starting in fiscal 2027. The reports said Prime Minister Sanae Takaichi is cautious about implementing large tax increases as she plans to cut the food sales tax from April 2027. Japan is revising its key national security documents before the end of the year, a process expected to reveal the scale and pace of defense spending growth in the coming years. Takaichi has already moved forward to the fiscal year ending in March the target of raising defense spending to nearly 2% of GDP, two years earlier than originally planned. Earlier local media reports suggested that Japan is considering raising its five-year defense budget to 80 trillion yen, with part of the increase potentially financed by raising corporate taxes. Katayama said, "Discussions are still ongoing about what capabilities Japan should aim to acquire over the next five years and what specifically needs to be strengthened to adapt to new forms of warfare."