Yen Slips As Aso Talks Intervention
Japanese finance minister Taro Aso spelled the “I” word for second consecutive day, indicating that Government may be nearing its patience level on Yen. He said Tokyo is ready to intervene if Yen exerts too much volatility, hurting the economy. Last time Japan intervened in the market was back in 2011, after the 9.2 earthquake, leading to massive Tsunami.
Speaking at the parliament Aso said, “For Japan, excessive volatility in yen moves that affect Japan's trade, economic and fiscal policies - be it yen rises or yen falls - is undesirable. If such moves occur, Japan is ready to intervene in the market".
Yen has weaken considerably this week, after reaching 18 month high against Dollar at 105.5 in the last.
He also said, “If the yen was gaining 5 yen in two days, it might gain 10 yen in four days. That would be too excessive and if such trend continued, it would be the kind of excessive currency volatility that G20 nations agreed was undesirable”.
So far, Japan’s tension over Yen has received cold response from United States. Treasury Secretary Jack Lew has described yen moves as orderly but according to Aso, he is in frequent contact with U.S. officials.
Considering the use “intervention” word against much popular “policy actions” and mentioning of foreign counterparts mean Japan is very close to a real intervention in the market.
However, last time in 2011, intervention failed to weaken Yen considerable despite G7 consent and coordination. It is doubtful that this time they would succeed.
Yen is currently trading at 108.9 per Dollar.