Japan's finance minister has warned against excessive currency moves. It comes as expectations that US easing will push the yen towards 15 year highs against the dollar. But the rise has been too gradual to force the Japanese central bank to act just yet.
The dollar has bounced back to around 85.4 yen, after hitting an eight month trough of 85.02 yen on Friday. But traders say it has room to fall again on expectations the Federal Reserve could ease monetary policy further, as early as this week. Japanese authorities fear a strengthening yen will harm a fragile export-led recovery, and prolonged deflation. The yen has recently neared 85 against the dollar and came within sight of levels not seen since 1995.