Japanese Yen bounces up from lows after Japan PM Takaichi’s intervention warnings
The Japanese Yen (JPY) bounced up from five-week lows against the US Dollar (USD) on Wednesday, turning positive on the daily chart, as Japan’s Prime Minister Sanae Takaichi warned that Tokyo is ready to take action against Yen weakness. The USD/JPY pair has pulled back from the 160.00 level, considered a line in the sand for Japanese authorities, to hit session lows at 159.55.
Prime Minister Takaichi affirmed that FX policy is important to support the Japanese economy and reiterated that Tokyo is ready to “take appropriate steps on FX as needed at any time,” comments similar to those that preceded an intervention on April 30.
Takaichi also said that transactions not based on real demand, including speculative moves, are increasing in the forex markets and pledged to deepen international cooperation, including with the US, to avoid unwanted Yen weakness.
Earlier on Wednesday, Finance Minister Satsuki Katayama pledged that Japanese authorities will “respond appropriately at any time as necessary” and added that BoJ Governor Kazuo Ueda, who is due to speak later on the day, is likely to show a positive stance towards a rate hike.
The USD/JPY pair fell about 400 pips on April 30 amid an alleged intervention, but it has gradually retraced losses ever since, returning to the key 160.00 level. Investors’ concerns about the negative impact of the energy shock in Japan’s Oil-importing economy, coupled with the comparatively low Japanese Government Bond (JGB) yields and an uncertain Bank of Japan (BoJ) tightening pace, remain a heavy weight for the JPY.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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