Japanese government issues consecutive exchange rate warnings and quarter-end capital flows push yen to break above the 157 threshold

(1) On Wednesday, the Japanese yen broke above the 157 mark against the US dollar, influenced by a series of exchange rate warnings issued by the Japanese government and quarter-end capital flows. (2) During early Asian trading, the yen rose as much as 0.6% against the US dollar, reaching as high as 157.45 yen per US dollar, making it the strongest performing currency among G10 currencies. (3) Japan's top currency official Jun Mimura stated on Monday that both the Japanese Prime Minister, Finance Minister, and even the US side have recently sent “very clear” signals regarding yen depreciation. (4) Japanese Prime Minister Sanae Takaichi also disclosed that when she met with US President Trump last week, Trump expressed concerns about the yen's weakness. (5) OCBC Bank strategist Moh Siong Sim said, “The market seems to be gradually accepting the idea that policy may be shifting towards a more yen-supportive stance.” He added that since the start of the week, after Trump voiced concerns over the weak yen, the Japanese currency has remained resilient. (6) Koike Shinya, Head of Global Markets Trading at Sumitomo Mitsui Trust Bank, noted that quarter-end fund flows may also be one of the factors driving the appreciation of the yen.