The yen touched 161.93 per dollar in New York trading on Monday, within a fraction of the 161.96 level that would mark its weakest since 1986. The move prompted an immediate response from Japanese Finance Minister Satsuki Katayama, who disclosed that she and US Treasury Secretary Scott Bessent had held an hour-long online meeting and “firmly agreed to take decisive measures whenever necessary” on foreign exchange. The statement briefly pushed the yen back to around 161, as markets priced in a higher probability of coordinated intervention.

The yen’s persistent slide reflects a widening interest-rate gap. The Bank of Japan raised rates last week but the pace of tightening remains far slower than the Federal Reserve’s, and some US analysts see a risk of further Fed hikes this year. Elevated oil prices, driven by the US-Iran conflict and concerns over navigation in the Strait of Hormuz, are adding to the pressure on the import-dependent Japanese economy. Katayama said the two officials also discussed global financial markets and the Middle East situation, including the Hormuz chokepoint.

Tokyo has already spent a record ¥11.7 trillion ($72.4 billion) on intervention between late April and late May, but the effects have faded. The latest talks, which Katayama described as a constructive follow-up to the G7 summit in Évian rather than an emergency call, signal that the threshold for further action is low. Viewed from New York, traders note that the alignment between Tokyo and Washington reduces the political risk of unilateral Japanese intervention, though underlying yen weakness persists.

The meeting also covered cooperation on advanced AI cybersecurity, specifically the Claude Mythos model developed by US start-up Anthropic, amid concerns that such technology could be misused for cyberattacks. For currency markets, the immediate focus is whether dollar-yen tests the 162 level this week. With Japanese authorities maintaining that they will “respond appropriately at any time,” the next milestone is any breach of the 161.96 threshold that triggers a fresh round of official buying.