By Yoshifumi Takemoto and Makiko Yamazaki
TOKYO, Nov 12 (Reuters) - Japan's top currency diplomat Atsushi Mimura warned market participants on Thursday that it is "too early to forget" this summer's intervention
as the yen again edged towards the key level of 160 to the dollar.
In his first remarks on foreign exchange since late September, Mimura said he believed recent currency moves have been excessively rapid.
"It's still too early to forget what happened this summer," he added, referring to Japan's yen-buying interventions in late July through early August, including one run jointly with the United States.
The dollar rose to 159.94 against the Japanese yen early on Thursday, hitting its strongest in more than two months, buoyed by growing expectations that the Federal Reserve will raise interest rates after hot US inflation data and hawkish remarks from policymakers.
Japan last conducted interventions on three days between July 30 and August 3, spending a record total of 15.4 trillion yen over the month, as the Japanese currency reached its weakest levels in 40 years near 164 per dollar.
The weak yen has been a headache for Japanese policymakers as import costs have surged. The yen-based import price index jumped 24.8% in October from a year earlier, data showed on Thursday.
"On foreign exchange, as was discussed at the Japan-US summit and as Prime Minister Takaichi has also said, we generally view an undervalued yen as problematic," Chief Cabinet Secretary Minoru Kihara told a regular news conference.
"We will continue to maintain close communication with the US Treasury through the finance ministry and work to preserve orderly foreign exchange markets."
Analysts at Mizuho Securities flagged the risk of Japanese intervention, saying the dollar was likely to continue its rise against the yen, benefiting from resilience in the US economy and persistently high inflation driven by robust AI investment.
"If the dollar breaks above 160 and the weaker yen fuels inflation, increasing the risk of a decline in support for Prime Minister Sanae Takaichi's government, Tokyo could carry out unilateral intervention," they added.
(Reporting by Yoshifumi Takemoto, Makiko Yamazaki and Kaori Kaneko; Editing by Shri Navaratnam, Edwina Gibbs and Clarence Fernandez)
