Japan warns of speculative yen moves, signals chance of more intervention

[TOKYO] Japan’s top currency diplomat Atsushi Mimura said on Friday that speculative moves persist in markets, a clear signal that Tokyo stands ready to intervene to shore up the yen.

“I won’t comment on what we’ll do ahead. But I will tell you that Japan’s Golden Week holidays have just started,” Mimura told reporters when asked whether Tokyo could intervene in the currency market.

The remarks came after Finance Minister Satsuki Katayama said on Thursday that the moment for “decisive action” was approaching.

She also urged reporters to keep their smartphones on hand throughout the holidays, a pointed signal of Tokyo’s readiness to intervene and deter speculators from exploiting thin liquidity to push the yen lower.

Hours later, Japan stepped into the market to support the yen, its first official currency intervention in nearly two years, two sources familiar with the matter told Reuters, sending the Japanese currency higher by as much as 3 per cent.

Mimura declined to comment on whether Japan intervened in the currency market on Thursday.

When asked whether currency moves remained speculative, Mimura said: “There’s no change to my view on markets.”

Japanese markets will be closed on Monday through Wednesday for Golden Week, which could cause wild swings in the yen due to thin liquidity, analysts say.

Mimura has also previously flagged the possibility of Japan intervening in crude oil futures on concerns that market volatility was spilling over into yen moves.

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“We have conditions in place and are always ready to take action,” Mimura told reporters when asked about volatile moves in the crude oil futures market. REUTERS