Japanese officials are signaling growing unease over the yen’s swift depreciation, with Finance Minister Katayama stressing close monitoring of ‘one-sided’ FX moves. Markets eye 155.0 as a potential intervention trigger, though U.S. approval remains uncertain, ING’s FX analyst Francesco Pesole notes.
Katayama warns FX moves watched with ‘high urgency’
“USD/JPY is now obviously causing concerns for authorities. Finance Minister Satsuki Katayama said overnight that the yen’s ‘very one-sided and rapid currency’ moves are being watched with a ‘high sense of urgency’.”
“This confirms it’s officially the rate of change rather than the level that matters, although previous instances of BoJ FX intervention tell us that psychological levels play a role too. This time, there is a larger question mark on whether the US will condone FX intervention.”
“Markets may be willing to test whether 155.0 is a line in the sand – inaction around that level could prompt more speculative long USD/JPY bets. However, hot Tokyo CPI and industrial production overnight raise the chance of a December hike, which is our base case, but only 45% priced in by markets.”
