Japan may see more yen intervention, faster BOJ rate hikes, ex-top FX diplomat says
Mitsuhiro Furusawa said intervention could come again at any time, while markets see a 76% chance of a BOJ hike in September, Tokyo Tanshi data showed.
- Former top currency diplomat Mitsuhiro Furusawa said Japan may conduct joint yen intervention "at any time" with the United States to counter the currency's recent weakness.
- The yen is "clearly too weak" at current levels, Furusawa said, hurting the economy by boosting import costs after sliding back to around 155 per dollar following joint intervention.
- Markets now see a 76% chance of a Bank of Japan rate hike in September, according to Tokyo Tanshi data, while Furusawa estimates the central bank ultimately wants rates around 1.5% to 1.75%.
- Prime Minister Sanae Takaichi's administration must not obstruct the BOJ's rate hikes, Furusawa said, emphasizing the need for monetary and fiscal policy to strengthen the Japanese economy.
- Last month, Japan's Ministry of Finance purchased yen in coordination with the U.S. Treasury, pledging to intervene again if disorderly market conditions continue threatening currency stability.
11 Articles
11 Articles
Japan may see more yen intervention, faster BOJ rate hikes, ex-top FX diplomat says
Japan may conduct joint yen intervention "at any time" and signal the chance of faster-than-expected interest rate hikes to stem the currency's falls, said Tokyo's former top currency diplomat Mitsuhiro Furusawa.
As the risks of inflation and the pressure on the national currency remain high, the Bank of Japan is expected to raise interest rates, and a tighter monetary policy is also expected in the long term.
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Navigating Japan Equities: joint yen intervention and its impact on equities, BOJ policy
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