Yen Rebounds, Is Japan Ready to "Intervene"?
The Japanese yen strengthened to around 157 per dollar on Monday, rebounding from a four-week low reached in the previous session. This strengthening occurred after Japanese authorities signaled that intervention could be necessary if exchange rate movements were deemed excessive.
Japanese currency diplomat Atsushi Mimura emphasized that the government would take "appropriate" measures to address excessively extreme exchange rate movements. He highlighted concerns about sharp, "one-way" movements.
This warning reinforces Finance Minister Satsuki Katayama's statement on Friday. Katayama said Japan would respond to speculation-fueled yen movements, as a weaker yen could push up import costs and put pressure on households.
The focus on intervention emerged after the Bank of Japan (BoJ) raised interest rates to 0.75%. This level is the highest borrowing cost since 1995 and is the BoJ's second increase this year, signaling a gradual shift away from its ultra-loose policy.
Despite the rate hike, the yen remains near its weakest levels against the euro and Swiss franc. This suggests that the interest rate hike was not strong enough to provide significant support for the yen in global markets. (asd)
Source: Newsmaker.id
