(Sept 30): The yen outperformed all its Group-of-10 peers on Wednesday as a series of government warnings on the currency and quarter-end flows provided support.

Japan’s currency strengthened as much as 0.6% to 156.38 before paring some of the gains and trading at 156.97 at 3.45pm local time (2.45pm in Malaysia). It also rose as much as 0.6% against the euro and 0.9% against the Australian dollar.

Atsushi Mimura, Japan’s top currency official, told Reuters on Monday that the country’s prime minister and finance minister, along with the US, have recently sent a “very clear” message about FX depreciation. Japan Prime Minister Sanae Takaichi also said US President Donald Trump shared concerns about the yen’s weakness when they met last week.

“It looks like the market is coming round to the view that policy could be changing to be more yen-supportive,” said Moh Siong Sim, a strategist at Oversea-Chinese Banking Corp. “The yen has been firm since the start of the week after Trump expressed concern over the weak yen.”

Speculation is growing that the Bank of Japan could raise interest rates again as early as next month, following its decision earlier this month to lift the benchmark rate to 1.25%. The yen has strengthened about 3.5% so far this quarter after Tokyo and Washington in July conducted their first joint intervention in 15 years to prop up the currency.

Shinya Koike, section manager of the global markets trading department at Sumitomo Mitsui Trust Bank, said that quarter-end flows may be behind the yen’s rise. Currency traders also said that the move is primarily due to month- and quarter-end flows.

The yen’s month-to-date rise of 2.33% is the most since April 2025 on a trade-weighted basis, according to the Bank of Japan’s nominal effective exchange rate index.

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