U.S. stocks, virtual currencies, and gold, which have led the market so far, are beginning to collapse. In the Tokyo market, the Nikkei 225 collapsed last week in the aftermath of the collapse of the U.S. stock market.
It has been customary for the yen to strengthen on the risk-off side when the Nikkei 225 collapses, but the yen has basically continued to weaken, although there was a move on Thursday to swing the yen back toward strength. The risk-off yen has disappeared.
The Japanese government bonds are also losing value and interest rates are rising, so this is a triple depreciation. One could argue that assets are fleeing Japan. This is not a good move.

However, why expand fiscal spending when the economy is suffering from inflation, and why implement policies that will weaken the yen even further?
Is PM Takaichi trying to create a Japanese version of truss shock?

In response to the yen’s continued depreciation and selling of government bonds, Finance Minister Katayama said, “We will take appropriate measures as necessary to deal with excessive volatility and disorderly movements in the foreign exchange market, in light of the Japan-U.S. Joint Statement of Finance Ministers issued this past September.
The US Treasury Ministers took it one step further by saying, “Appropriate responses (since intervention is firmly included in the US-Japan Finance Ministers’ paper) will include currency intervention.”
Although the initial reaction was muted, the surprisingly early mention of intervention alarmed the market, which bought the yen back to around 156.56 yen as we entered the European market.

However, it is not clear whether Katayama’s statement is really an agreement from the U.S. to intervene in the currency market.
Even if it is written in the paper, it says, “Intervention should be reserved for those that address excessive volatility or disorderly movements in exchange rates, under the assumption that such intervention is considered equally appropriate as a response to excessive volatility or disorderly depreciation or appreciation.
Are the movements disorderly enough to be alarming?

The yen will adjust a bit and then sell off again.