Japan has appointed Atsushi Mimura as its new top foreign exchange diplomat amid the yen’s plunge to a 38-year low against the dollar, sparking anticipation of imminent market intervention. Mimura, a veteran in financial regulation, replaces Masato Kanda, who recently led record-breaking yen-buying efforts. As the yen slid to ¥161 per dollar, Finance Minister Shunichi Suzuki expressed deep concern over rapid currency moves and stressed the urgency of maintaining confidence in the yen. Mimura’s appointment comes at a critical time, with Japan’s economic stability and global financial ties hanging in the balance.

Japan hired a new top foreign exchange ambassador on Friday, as the yen fell to a 38-year low versus the dollar, boosting concerns about Tokyo’s imminent market intervention to support the battered currency.

Atsushi Mimura, a financial regulation veteran, succeeds Masato Kanda, who launched the largest yen-buying intervention on record this year.

The change is part of an annual personnel turnover and comes as officials increased their warnings about intervention.

Finance Minister Shunichi Suzuki stated on Friday that officials were “deeply concerned” about the impact of “rapid and one-sided” foreign exchange movements on the economy.

On Friday, the yen fell past ¥161 per dollar, reaching its lowest level since 1986.

Suzuki stated at a regular news conference that authorities would respond appropriately to excessive currency movements and that trust in the yen was maintained.

“The government is closely monitoring developments in the foreign exchange market with a high sense of urgency,” Suzuki said, emphasizing the importance of continuing to advance fiscal reform measures.

The yen sank to ¥161.15 per dollar on Friday morning, with neither overnight decline in U.S. yields nor data showing strong consumer price hikes in Tokyo to stop the plunge.

Japanese authorities are under increased pressure to prevent significant currency falls as traders focus on the interest rate differential between Japan and the United States.

In response to the yen’s 34-year low of ¥160.24 per dollar on April 29, Tokyo spent ¥9.8 trillion to intervene in the foreign exchange market in late April and early May.

Mimura’s nomination as senior foreign exchange diplomat will take effect on July 31, following a meeting of the Group of 20 finance ministers and central bank governors in Rio de Janeiro on July 25.

There is little information available on his stance on currency policy.

The 57-year-old, who is now the head of the ministry’s international office, will be appointed vice finance minister for international affairs, where he will supervise Japan’s currency policy and coordinate economic policy with other countries.

Mimura, who spent about a third of his 35-year government career at Japan’s bank regulator, has extensive experience and worldwide relationships in financial regulation.

During his three-year tenure at the Bank for International Settlements in Basel, Switzerland, Mimura collaborated with Mario Draghi to establish the Financial Stability Board amid the 2008-2009 global financial crisis to improve financial regulation and oversight.

Last year, he worked at the Finance Ministry on a change to the rules governing the Japan Bank for International Cooperation, which expanded the scope of the state-owned bank and made international enterprises critical to Japan’s supply chains eligible for bank loans.

Mimura was also a member of a government team that briefed foreign investors on the 2020 modifications to foreign ownership laws, dispelling the myth that stricter requirements were intended to deter foreign investment in Japan.

Mimura succeeds Kanda, who, throughout his three-year tenure, vigorously jawboned markets to prevent significant yen declines he claimed were caused by speculators.

Kanda also oversaw a period of yen-buying intervention in late April and early May.

A weaker yen benefits Japanese exporters but causes problems for policymakers because it raises import costs, adds to inflationary pressures, and squeezes people.

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