Tokyo authorities ramp up their verbal efforts to influence the Japanese yen

Mimura Expresses Concerns Over Market Movements

• Recently, the market has experienced sharp, one-directional fluctuations.
• Mimura voiced significant worries regarding recent foreign exchange developments.
• He emphasized that decisive measures will be considered to address excessive volatility, with all possible actions on the table.
• According to Mimura, current shifts in the Japanese yen lack support from underlying economic factors.
• He identified heightened volatility as the primary challenge at present.
• Mimura noted that both a stronger and weaker yen present their own sets of advantages and disadvantages.
• He also reported hearing widespread concerns about the negative impact of a weaker yen on import expenses.

Following these remarks, the USD/JPY pair briefly dipped to 158.67 before rebounding to approximately 158.80, reflecting a 0.2% decline for the day. The pair has retreated from around 159.20 at the session’s open, amid a series of statements from Tokyo officials addressing the currency’s movement.

For additional context, Japan’s finance minister Katayama recently made a notably precise observation regarding the yen’s price action. He pointed out that the decline in the yen on January 9th, which occurred last Friday, did not align with the nation’s economic fundamentals.

As discussed in the referenced article, this situation is intriguing from multiple perspectives. With USD/JPY approaching the 160.00 level earlier today, the likelihood of official intervention appears to be increasing.