Seemingly countering his vow to avoid intervention on the yen’s behalf just a week ago, the policy maker said that “if the currency market moves abnormally, we may take necessary steps in the national interest.” It may seem that Fujii is flip-flopping on his position; but really he is just telling the market that such a step would only be considered under unusual circumstances – really no country can really write it off. For those with a fundamental concern that moves beyond a week, price pressures are another problem. The annual, national CPI reading for August plunged a record 2.4 percent. It seems deflation is setting in.
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