Japan finance minister Katayama continues with the verbal intervention on the yen currency

• Have repeatedly said that recent forex moves are not reflecting fundamentals
• Joint statement between US and Japan can be interpreted as saying intervention to counter forex moves out of line with fundamentals is allowed
• Monetary falls under the jurisdiction of the BOJ
• My dialogue with BOJ governor Ueda has been very good
• Have not received inquiries from the BOJ on other central banks’ joint statement in backing Fed chair Powell
• Not sure when yen carry trades peak out as Japan-US rate differentials are set to narrow further

In prior episodes, the language used in verbal intervention by Tokyo officials tend to follow a certain script. But so far, Katayama has been more bold in her warnings especially in the ones this week. That being said, I guess it is necessary as lawmakers and policymakers are facing an uphill battle in trying to quell speculators this time around.

As a reminder, she had earlier this week singled out the 9 January price action in the yen currency as being not in line with the fundamentals. Now, she’s saying that recent moves are also not reflecting that as well. It seems that we are reaching a bit of a desperation point in trying to get market players to stop the selling in the currency.

As for the BOJ comments, I don’t see anything new in that. However, the government’s stance remains clear in that they do want the central bank to not push for rate hikes. But with the currency under threat now, is it going to be a case of needing to let go? We shall see.

USD/JPY is down 0.3% to 158.20 on the day, still holding above the 158.00 mark so far. Despite the barrage of verbal intervention this week, the pair is down by less than 150 pips from the highs. So, it speaks to the kind of buying appetite still out there. But at least for now, the near-term bias has shifted a little today.