Senior Japanese foreign exchange official Atsushi Miura stated on Tuesday (January 21) that Japan is closely monitoring its foreign exchange market positions, including speculative betting positions, as exchange rate fluctuations are unwelcome.

The Deputy Minister of Finance responsible for international affairs said, "We are certainly paying attention to the speculative positions on a daily basis, as stated in the G7 exchange rate agreement, excessive fluctuations or disorderly exchange rate movements are not welcome

When asked about this week's policy meeting of the Bank of Japan, Atsushi Miura said that the government and the central bank are in close communication through various channels every day.

He said, 'I have been expressing my views to them. The Bank of Japan may also be collecting various information, including market and annual wage negotiations.'.

After US President Trump stated that the US may impose tariffs on Canada and Mexico in the near future, the US dollar rebounded in volatile Asian trade on Tuesday.

The weak yen has always been a headache for Japanese decision-makers, as it has pushed up import costs, thereby accelerating inflation and suppressing consumption.

Some analysts blame the Bank of Japan's ultra-low interest rates and slow pace of rate hikes for the weakening of the yen.

Sanmura Dun emphasized the need to support consumption by shifting real wages towards the positive range.

He said, "The outlook for real wages is very important. From our perspective, a weak yen will push up inflation by raising import costs

Sources say that unless Trump causes any impact on the market, the Bank of Japan is expected to raise interest rates on Friday, which will raise short-term borrowing costs to levels not seen since the 2008 global financial crisis.