Atsushi Mimura, Japan’s top currency diplomat, said in an interview with NHK that authorities are closely watching for any renewed build-up of yen carry trades, which could heighten market volatility. Yen carry trades involve borrowing yen at low interest rates to invest in higher-yielding assets, and they have been linked to the yen’s significant depreciation earlier this year.
Mimura noted that many of these trades have already been unwound following the Bank of Japan’s (BOJ) decision to raise short-term rates on July 31, which contributed to a sharp yen rebound. However, he warned that a resurgence in such trades could increase market instability, and authorities remain vigilant.
He also emphasized that the government is prepared to act if currency movements deviate significantly from economic fundamentals, affecting companies and households. Mimura took over Japan’s currency policy role in July, succeeding Masato Kanda.


