Yen strengthens on intervention signals, fiscal stimulus and inflation pressures

David Morrison

SENIOR MARKET ANALYST

21 Nov 2025

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The big overnight move across FX came from the Japanese yen. The currency made gains across the board, having weakened significantly since early October, following the surprise election of Sanae Takaichi as leader of the governing LDP. Last night’s rally in the yen came as traders responded to comments from Japanese Finance Minister Satsuki Katayama. She said that intervention to deal with speculation and excessive volatility (for this, read: halt the slide in the yen) was a possibility.

Source: TN Trader

At the same time, Prime Minister Sanae Takaichi's cabinet approved a fiscal stimulus package worth around $135 billion. This has undermined confidence in the currency, as concerns grow over Japan’s deteriorating fiscal position. And last night’s latest inflation release showed that Core CPI rose at its fastest pace since July, reinforcing the case for potential Bank of Japan tightening. Meanwhile, the Dollar Index edged back up towards 100.00, a level which has persistently held as resistance.


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