Japan basically confirmed FX intervention for first time in nearly two years after yen breached 160/USD, sending it 3% higher to 155.5.
Japan basically confirmed FX intervention for first time in nearly two years after yen breached 160/USD, sending it 3% higher to 155.5. Mimura warns further action possible during Golden Week.
US and Japan in extremely close contact on markets. Summary: As flagged in our earlier coverage, Japan has now all but confirmed it intervened in the foreign exchange market on Thursday, its first such action in nearly two years, after the yen breached the 160 per dollar level widely seen as authorities’ line in the sand The intervention sent the yen surging by as much as 3%, reaching 155.5 per dollar before trimming gains to stand at 156.99, still well clear of the 160 level that triggered the response Atsushi Mimura, the Ministry of Finance’s most senior official on international financial affairs, declined to confirm the intervention directly but delivered a pointed warning to speculators, noting that Japan’s Golden Week holidays have just started and that there is no change to his view that market moves remain speculative in nature Finance Minister Satsuki Katayama had telegraphed the action on Thursday, warning of decisive action and notably urging reporters to keep their smartphones on hand throughout the holiday period, an explicit signal of readiness to move again Mimura confirmed Japan is in extremely close contact with the US on currency markets, and that both countries agree action may be needed depending on market developments, a co-ordination signal that meaningfully raises the deterrent effect of any further intervention Japan’s previous intervention was in July 2024, when the yen hit a 38-year low of 161.96 per dollar Japanese markets will be closed Monday through Wednesday for Golden Week, a period of sharply reduced liquidity that analysts warn could invite aggressive speculative attacks on the yen The structural drivers of yen weakness remain in place: the BoJ is raising rates slowly, the Fed is not cutting given persistent inflationary pressure, and oil…