Japanese Finance Minister Kato Katsunobu expressed concern about the yen's trajectory as the currency fell to its lowest level since March following dovish interest rate signals from the Bank of Japan. Speaking on Friday, he stated, "The government is paying close attention to foreign exchange market movements, including speculative trading activities," adding that "it is crucial for exchange rates to remain stable and reflect economic fundamentals."

Kato's remarks came after the yen-dollar exchange rate broke through the 150 level on Thursday. The Bank of Japan had decided to keep interest rates unchanged, with Governor Ueda Kazuo delivering distinctly dovish signals during the post-meeting press conference, dampening market expectations for near-term monetary policy tightening.

Tokyo market strategists warn that the yen could weaken further to 155 yen per dollar, a level that could trigger investor concerns about Japanese authorities intervening in the market to support the currency. "If the Bank of Japan doesn't raise rates, the yen could fall to the 155 level," said Marito Ueda, General Manager of SBI Liquidity Market Research Department. "At that point, intervention would be the only option."

While Kato did not comment on specific exchange rate levels, he acknowledged having noted various market views. As of press time, the yen-dollar exchange rate was trading around 150.46.

The yen depreciated approximately 4.5% in July, breaking seasonal patterns. Domestic political uncertainty in Japan and tariff issues have put pressure on the currency. Just ahead of the Bank of Japan's policy decision, traders had also scaled back expectations for Federal Reserve rate cuts, further intensifying downward pressure on the yen.

"Ueda's stance remains quite dovish, so I believe there's a higher possibility of the yen breaking through 155 per dollar," said Tohru Sasaki, Chief Strategist at Fukuoka Financial Group. "I also don't think the Fed will cut rates this year. If rate cut expectations continue to fade, the dollar will be in demand."

Strategist Mark Cranfield believes that combining this week's statements from the Fed and Bank of Japan with yield curve changes, dollar-yen traders will target intervention zones closer to 155 rather than current levels. This aligns with the Ministry of Finance's traditional rule of thumb: responding first with verbal intervention when rapid fluctuations reach 10 yen, then actually buying yen if necessary. Last week, the yen briefly fell near the 145 level, meaning the "volatility timer" may have reset, creating expectations for a 10-yen fluctuation range.

"Strong U.S. economic data and dollar strength will push the dollar-yen rate higher. If it breaks through 152, the next target will be 155," said Shoki Omori, Chief Trading Strategist at Mizuho Securities in Tokyo.

Additionally, Kato noted that Japan's recent trade agreements with the EU and United States help reduce trade policy uncertainty and lower the drag risk on Japan's and the global economy. On Thursday, the White House issued an executive order setting reciprocal tariff rates on Japanese goods at 15%, implementing a previously reached agreement between the two countries. The new rates will take effect on August 7.

However, Kato emphasized the need for continued monitoring of the new rates' impact. He stated, "The Japanese government will take all necessary measures to mitigate the impact of tariffs on Japanese industry and employment," adding, "We will also comprehensively analyze the impact of tariffs on Japan in conjunction with various trade agreements and other countries' policy developments."