Yen traders wary of intervention as Japan warns against drop
yen after the currency slumped to its weakest level against the dollar since 1990.
Following weeks of flirting with the closely watched 152 level versus the greenback, the yen blew straight through this mark on Wednesday and all the way to 153 as US inflation data reverberated through global markets.
That's put traders on alert for intervention by Japanese authorities, whose jawboning of markets has done little to change the downward momentum.
«Whether this involves currency intervention or not, we authorities are prepared for all situations all the time,» Masato Kanda, Japan's top currency official, told reporters Thursday morning. Finance Minister Shunichi Suzuki later echoed that warning, telling reporters officials are watching currencies «with a high sense of urgency.»
The latest leg lower in the yen was triggered by consumer price readings that prompted investors to pushed back expectations for interest rate cuts by the Federal Reserve this year. That suggests the US interest rate gap with Japan will remain wide for longer.
Kanda on Thursday stopped short of warning that authorities were ready to take «bold» measures, which is among the most direct references to action in the ministry's playbook.
«Intervention could take place anytime now. Given the yen level, it wouldn't be strange for officials to intervene tomorrow, for example, just to buy some time,» said Takeshi Minami, chief economist at Norinchukin Research Institute. «The yen moves are driven by market bets for Fed rate cuts, so Japan's action
