JPY: Japan strengthens direct intervention threat – MUFG

By FXStreet Lee Hardman, Currency Analyst at MUFG, suggests that the verbal intervention from Japanese officials has had only a limited impact at dampening yen strength in the near-term.

Key Quotes

“However, it was more notable that Japanese Chief Cabinet Secretary Suga stated in an interview with Reuters over the weekend that the G20’s agreement to avoid competitive currency devaluations does not mean that Japan can not intervene in response to one-sided currency moves. He stated as well that Prime Minister Abe’s comment to the Wall Street Journal last week that countries should avoid “arbitrary intervention” was misunderstood and does not rule out intervention for Japan.

He explained that “what the G20 is talking about is arbitrary intervention, which is different from responding to a one-sided move”, and that Prime Minister Abe’s “comments were based on the G20 understanding that long-term manipulation of currencies is undesirable”. It is clear that there has been some backtracking from Japanese officials with the aim to send a stronger signal to the market that the threat of direct intervention is higher than previously assumed.

As a result further comments overnight from Chief Cabinet Secretary Suga carry more weight after he stated that Japan is watching FX …read more

Source:: FX Street