Japan is prepared to intervene in currency markets to support the yen, according to the government’s top spokesperson, Chief Cabinet Secretary Minoru Kihara. The yen has been sliding, reaching levels unseen in nearly two years, due to a broad dollar rally and rising bets that the Federal Reserve’s next move could be a rate hike.

Impact on Japan’s Economy

A weak yen helps boost corporate profits by making it easier for manufacturers to export goods, but it increases the burden for firms and households through higher import costs. The Japanese government will closely watch market developments and scrutinize the effects of the yen’s decline.

The Bank of Japan’s recent move to lift rates to a 31-year high has done little to steady the currency, with its policy rate still at just 1%, well below the Fed’s 3.50%-3.75% range. Finance Minister Satsuki Katayama has warned that authorities are always prepared to take decisive measures to support the yen.

Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.