Japanese finance minister Katayama:
Won’t comment on forex levelsImportant for currencies to move in stable manner reflecting fundamentalsRecently seeing one-sided, very rapid movesWill take appropriate action based on U.S-Japan forex agreementFX intervention is an option as it is mentioned in Japan-US agreement in SeptemberWill issue govt debt to fund part of stimulus package as neededWill take appropriate action vs excess volatility, disorderly FX movesWe are not trying to inflate size of spendingRecent FX moves one-sided, rapid so am alarmed
I bolded some of the more forthright comments. The intensity of the language that officials, such as the fin min here, use is a precursor to the next step. Dropping in the agreement with the US is also a next step, as she has done here. It hints at co-ordinated intervention, not just from Japan.
Once again I need to mention that the fundamentals are against Japan here. These point to a weaker yen. Actual intervention, when it comes, is likely to be a thin market time window, I’ve mentioned during Thanksgiving a few times. Keep an eye out.
This article was written by Eamonn Sheridan at investinglive.com.