Japan Faces Trouble Controlling Damaging Yen Rises

Japanese efforts to stem sharp increases in the yen could face increasing opposition from other major economies, making it even more difficult for premier Shinzo Abe’s administration to reflate the world’s third largest economy out of stagnation.

Senior government officials, including the country’s top spokesman, have escalated warnings to speculators against pushing up the yen too much, stressing their readiness to take “appropriate action” in the market against what they see as one-sided moves.

But the jawboning has failed to stop market participants from testing policymakers’ resolve with many betting Tokyo will not intervene unless the dollar falls below 105 yen or even 100 yen.

Finance Minister Taro Aso issued a fresh warning on Friday, saying that rapid currency moves were undesirable and that authorities will take steps as needed.

Reuters

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Craig Erlam
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.