Finance Minister Katayama warns of 'decisive measures' as yen weakens to 161 level; intervention alert rises

Finance Minister Katayama warns of 'decisive measures if speculative moves' as yen weakens to 161 level In the New York market on the 18th, the yen temporarily fell to the upper 161 yen range, its lowest level in about 1 year and 11 months. On the 19th, Finance Minister Satsuki Katayama cautioned the market in a post-cabinet meeting press conference. The widening of the Japan-US interest rate gap due to expectations of a rate hike by the Fed within the year is accelerating yen selling, and there is growing concern about further intervention by the government and the Bank of Japan. 12

Hachijuni Nagano Bank to raise lending rates from August to levels not seen in about 31 years Following the Bank of Japan's policy rate hike to 1.0%, Hachijuni Nagano Bank will raise its short-term prime rate by 0.25 percentage points, bringing it to a level not seen since 1995 at the former Hachijuni Bank. Ordinary deposit rates will also be raised by 0.10 percentage points, clearly showing the ripple effect on regional financial institutions. 3

Three major securities firms downgrade their FY2026 ordinary profit forecasts for automobiles and steel Three major domestic securities firms have lowered their ordinary profit forecasts for the automobile and steel sectors for fiscal year 2026. Incorporating cost increases due to the weak yen and slowing demand, cautious views on corporate earnings prospects are spreading. 4

Dollar-yen reverses from 161 yen level, with defense line around 162 yen in focus In the Tokyo market on the 19th, the dollar-yen weakened to 160.99 yen at one point, adjusting the previous day's yen selling. The 162 yen level is seen as the government's next defense line, and intervention concerns capped the upside. 5

Weekly FX outlook: Dollar-yen may struggle to rise; focus on intervention alert and US indicators Even after the BOJ rate hike, the yen continues to weaken, and the dollar is strengthening due to the hawkish stance of the FOMC. Next week, the US core PCE price index is expected to accelerate, which would be a dollar-buying factor, but intervention concerns and easing inflation pressure from lower oil prices could cap the dollar's upside. 6

Japanese stocks at 70,000 yen level; next test is US Micron earnings After the Nikkei average broke above the 70,000 yen level for the first time, the earnings of US Micron Technology, to be announced on the 24th, will determine the sustainability of semiconductor-related stocks. If the results are good, a further rise is expected; if they are priced in, a correction scenario is in mind. 7