By Makiko Yamazaki

TOKYO (Reuters) – Top Japanese finance officials stated on Friday that the government is "alarmed" by recent foreign exchange moves and is prepared to intervene if speculative activities are considered excessive, as the yen continues its rapid decline.

Against the Japanese yen, the dollar reached a peak of 157.93 on Friday, the highest since July, after the Bank of Japan (BOJ) maintained interest rates unchanged on Thursday and its governor provided few indications of how soon borrowing costs might rise.

"We have been observing one-sided and sharp moves recently," said Finance Minister Katsunobu Kato during a regular news conference on Friday.

"Given the alarm we feel over recent currency market developments, including those influenced by speculators, we will take appropriate action against excessive movements," he remarked.

It is uncommon for Japanese policymakers to explicitly label the currency market situation as alarming, reflecting the government’s increased concerns regarding the depreciating yen.

Later in the day, Japan's top currency diplomat, Atsushi Mimura, reiterated the government's position, expressing alarm over currency movements and mentioning a readiness to act appropriately.

The BOJ's rate-setting meeting on Thursday followed the U.S. Federal Reserve's interest rate cut but indicated a more cautious easing path for the next year, suggesting that the U.S.-Japan interest rate differentials may not diminish as quickly as expected.

When asked about the U.S.-Japan rate differentials and the BOJ's communication style, Mimura, who is also the vice finance minister for international affairs, declined to comment.

Japan last intervened in the market to buy yen in July to support its currency after it fell to a 38-year low below 161 yen per dollar.

In the news conference, Kato mentioned that the finance leaders of the Group of Seven (G7) nations held an online meeting under Italy's presidency to discuss support for Ukraine and the implications of artificial intelligence on the global economy.

Kato, along with BOJ Governor Kazuo Ueda, participated in the call.