Japan¡¯s finance minister and its top currency official have issued fresh warnings to speculators after the yen weakened to its lowest level against the dollar in 18 months amid reports of a snap general election.

¡°We won¡¯t rule out any means and will respond appropriately to moves that are excessive, including those that are speculative,¡± Satsuki Katayama told reporters on Wednesday, in a hint that direct intervention in markets was among the options available. ¡°We¡¯ve mentioned this to the prime minister today as well.¡±

¡°The kind of sudden moves we saw on Jan. 9 have nothing to do with fundamentals, and are deeply concerning,¡± she added. Her message was soon backed up by Atsushi Mimura, the ministry¡¯s top official in charge of the yen, who reiterated that no options were being ruled out.

The yen strengthened to ?158.68 against the dollar after Katayama and Mimura spoke, having reached ?159.45 per dollar in the morning, its weakest since July 2024. That¡¯s the month when Japan last intervened in markets to prop up the currency. With the yen so close to levels where authorities have previously taken direct action, traders have been on guard for any concrete moves.

While the Bank of Japan has lifted interest rates to their highest level in 30 years and the Federal Reserve has lowered U.S. rates, downward pressure on the yen has continued. Bets against the yen picked up speed after Sanae Takaichi emerged as the leading candidate to become prime minister last October. Takaichi is known for her pro-fiscal and monetary stimulus views.

Reports in recent days that she will call an early election in February have fueled further weakness in the yen by reinforcing the view that her expansionary policies will continue.

Katayama said she couldn¡¯t comment on whether she had discussed a possible election with Takaichi.

The finance minister has ramped up her language on the yen since late last year. In December she said that Japan has a ¡°free hand¡± to take bold action against currency moves that are not in line with fundamentals.

Japan¡¯s Finance Ministry spent around $100 billion on direct intervention to support the yen in 2024. While the 160 mark provided a rough line in the sand for action at that time, officials repeatedly say that specific levels are not a consideration and that any action is taken to stop excessive or abrupt moves.

The finance minister spoke with her U.S. counterpart, Treasury Secretary Scott Bessent, earlier this week. She said they shared concerns over one-sided yen moves, a comment that gave some observers the impression she was seeking a green light to take action if needed. Still, those discussions have done little to dissuade...