Speculation is mounting that the Japanese government is ready to intervene for the second time this year in order to resuscitate the plummeting yen currency.
The USD/JPY pair surpassed the 150 yen threshold this Thursday morning, a price point widely considered as a symbolic barrier for sure-fire intervention.
A timid BoJ has been reluctant to change its ultra-loose monetary policy, instead maintaining a negative -10% interest rate.
The US dollar has relentlessly gained against the yen – Source: capital.com
But with the yen continuing its relentless downspiral to lows not seen since 1990, and import bills skyrocketing, pressure is mounting on the government to do what the bank will not.
Vice finance minister Masato Kanda told reporters that authorities were "always ready to take necessary action as excessive volatility has become increasingly unacceptable," while Japan’s finance minister Shunichi Suzuki told reporters that he will "take decisive action".
"We cannot tolerate excessive, rapid currency market moves driven by speculative action," Suzuki said, adding: "We will continue to watch currency moves meticulously and with a sense of urgency."
The government’s last interview cost 2.8tn yen (US$19.7bn at the time), but the size of the pending intervention is a matter of speculation.
The BoJ has a chance oto ward off intervention ahead of next Friday’s policy decision, but consensus remains dovish.
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