Sentiment is fragile: some stock markets have recovered around half of their recent losses but Meta’s slump throws a cloud over that, while U.S. bond yields spiked following a weak auction of five-year notes.
Unease around currencies is deepening after the dollar on Wednesday smashed through 155.00 yen with no sign of Japanese authorities to slow or reverse the yen’s fall. Will Tokyo act?
An executive from Japan’s ruling LDP told Reuters the party is not yet in active discussion on what yen levels would be deemed worth intervening in the market, but a continued slide towards 160 or 170 to the dollar could trigger action.
It’s hard to imagine the Ministry of Finance letting the dollar go to 160 never mind 170 yen before intervening. Then again, few would have imagined there would be no intervention at 155 yen either.
Will MOF instruct the BOJ to wade into the FX market and buy yen just as the central bank starts its two-day policy meeting?
In the current climate, which prompted a rare three-way joint statement on exchange rates from the United States, Japan and South Korea this month, nothing can be ruled out.
