Japanese Authorities May Intervene in Currency Market
Japanese authorities are considering intervening in the currency market to address the recent excessive decline of the yen, according to Satsuki Katayama, acting chairperson of the Liberal Democratic Party's policy research council.
Katayama believes the recent volatility in the dollar/yen exchange rate, which has seen the dollar rise from around 140 to near 155 this year, is excessive and not in line with economic fundamentals. She believes that intervention by Japanese authorities would be justified and would not face criticism.
Katayama also believes that the Bank of Japan should not rush into raising interest rates again, given the uncertainty surrounding the global economic outlook.
The recent decline of the yen has been driven by a broad dollar rally, fueled by receding market expectations of a near-term U.S. interest rate cut. This has pushed the yen to a 34-year low, increasing the likelihood of intervention by Japanese authorities.
The dollar currently stands at 154.85 yen, approaching the 155 level that many traders believe could trigger intervention by the Japanese government.