Japan’s authorities have warned they are prepared to respond to sharp and one-sided moves in the yen after the currency weakened markedly against the dollar, despite a recent increase in interest rates by the Bank of Japan, Kyodo News reports.

The comments came after the yen fell to around JPY158 per dollar, its weakest level in about a month, prompting renewed concern in Tokyo about rapid foreign exchange movements. Senior officials said they were closely monitoring market developments and stood ready to take appropriate action if volatility intensified.

Government representatives stressed the importance of currency moves that reflect underlying economic fundamentals rather than speculative pressures. The message echoed earlier warnings from the finance ministry, which investors interpreted as an attempt to slow the yen’s decline through verbal intervention.

The yen’s weakness has sharpened the policy dilemma facing Japan. While a softer currency boosts exporters’ overseas earnings when converted into yen, it also raises the cost of imports for the resource-dependent economy, adding to inflationary pressure on households.

The currency has remained under pressure since the central bank lifted its policy rate to its highest level in three decades last week but offered little guidance on the pace of any further tightening. That lack of clarity has weighed on the yen, even as interest rates have moved higher.