After weeks of rhetoric from the new Noda administration, the Japanese Ministry of Finance has finally intervened in the markets after the yen hitting a record high of 76.54 earlier today. Although no statement has been made about the size of intervention or target rate, the spike seems to be pivoting at 79.000.
New Finance Minister Jun Azumi pointed to the intervention was due to “strong signs on speculation,” including “not reflecting fundamentals of economy.” Other notes he made in the press conference shortly afterwards include:
“Japan will continue to intervene until satisfied”
“Currently commutating with overseas authorities”
“Yen rate needs to reflect fundamentals, make sense”
“Yen not reflecting fundamentals distorts economy”
This has been the third time that the Ministry of Finance has intervened in the currency markets to temper the strength of the yen, hurting the competitiveness of the export economy. Japan has previously conducted this action on March 18th and August 4th of this year. As with previous times, the intervention was taken only by the central government and without the assisstance of the Bank of Japan.
USDJPY 5 minute chart. Vertical line shows intervention.
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