Japan's Finance Minister stated that authorities are prepared to take necessary actions against forex market volatility at any time, a move seen as a warning to speculators just hours before the Bank of Japan announces its policy decision.

"I have repeatedly mentioned that we will take decisive action when necessary," Finance Minister Shunichi Katayama said on Tuesday. When asked whether the government would remain vigilant during Japan's upcoming Golden Week holiday, she added: "We are prepared to respond around the clock." The Bank of Japan is expected to announce its latest interest rate decision in a few hours, with markets widely anticipating no change; the voting result will be a focus, as the market is assessing the possibility of a rate hike in June. Statements made by Governor Kazuo Ueda at the post-decision press conference will also be closely watched. According to overnight swap market pricing, the probability of a rate hike on Tuesday is less than 3%, while the chance of a June hike has risen to 65%. The US dollar/Japanese yen USD/JPY is currently trading around 159.5, near the level at which authorities intervened in the FX market in 2024.