Japan finance minister repeats FX warning as yen hovers around 162
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Katayama's comments largely repeat the standard verbal warning Tokyo has issued repeatedly as the yen has languished near multi-decade lows, and are unlikely to shift the currency's trajectory on their own given the lack of any new specifics on timing or thresholds. With the yen
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The desk believes that the Japanese yen is facing significant headwinds due to a dovish stance from the Bank of Japan (BoJ) and ongoing geopolitical tensions. Per the full note from Giuseppe Dellamotta, Japan's top currency diplomat has issued a 'final warning' regarding potential intervention in the FX market, indicating a serious concern over the yen's depreciation. The BoJ's Governor Ueda's remarks about inflation being below target and the need for caution in gauging economic impacts further underscore the lack of support for the yen. With the consensus target for USD/JPY at 1.075, the desk sees limited upside for the yen in the near term, especially as other central banks adopt more hawkish policies.