FX.co ★ Yen Strengthens on Katayama Remarks

The Japanese yen strengthened toward 161 per dollar on Friday, nearly erasing its losses from earlier in the week after Finance Minister Satsuki Katayama said the government would encourage domestic pension funds to increase their holdings of Japanese financial assets. Investors also awaited intervention data due later this month to assess whether Japanese authorities were behind the sharp but short-lived yen rallies seen in recent weeks.

At the same time, traders evaluated data showing that Japan’s producer prices rose 7.1% in June, the fastest annual increase since March 2023, underscoring persistent cost pressures driven by the Middle East conflict and the yen’s steep depreciation. Oil prices retreated as well after reports indicated that the US and Iran would continue peace negotiations despite a recent escalation in hostilities, offering additional support to the Japanese currency.