The yen was nursing a nearly 4% drop this week, its worst decline since October 2024

Most Asian currencies kept to a tight range, while the yen stemmed some recent losses following strong producer inflation data.

The yen was also aided by speculation over whether Tokyo will intervene in currency markets, after ministers expressed some discomfort over sustained selling of the currency.

Other Asian currencies kept to a tight range, and were sitting on a muted weekly performance.

The yen firmed marginally on Friday, with the USD/JPY pair dropping almost 0.3% from an eight-month high.

Producer price index data for September, released earlier in the day, read stronger than expected, pointing to a potential rise in broader inflation last month.

The print sparked some uncertainty over the BOJ’s plans to hike rates, given that the central bank has maintained its stance that interest rates will rise in tandem with inflation.

But the BOJ is widely expected to face increased resistance from the government over its hiking plans, especially with Sanae Takaichi set to take the prime ministership.

Takaichi’s election as the leader of the ruling Liberal Democratic Party triggered steep declines in the yen this week, as markets bet on more fiscal spending and accommodative policy under her government.

The yen was nursing a nearly 4% drop this week, its worst decline since October 2024.

But outsized weakness in the yen spurred speculation over whether the government will intervene in currency markets. Japanese Finance Minister Katsunobu Kato added to this speculation by stating on Friday that the government was concerned over “one-sided, rapid moves” in currency markets.

Kato’s comments also offered the yen some relief.

The yuan’s USD/CNY pair dropped marginally, as did the Singapore dollar’s USD/SGD pair.

The Australian dollar’s AUD/USD pair gained 0.2%, while the won’s USD/KRW pair shed 0.1% as trade resumed from a week-long holiday.