Japanese finance minister Katayama:
- Won’t comment on forex levels
- Important for currencies to move in stable manner reflecting fundamentals
- Recently seeing one-sided, very rapid moves
- Will take appropriate action based on U.S-Japan forex agreement
- FX intervention is an option as it is mentioned in Japan-US agreement in September
- Will issue govt debt to fund part of stimulus package as needed
- Will take appropriate action vs excess volatility, disorderly FX moves
- We are not trying to inflate size of spending
- Recent FX moves one-sided, rapid so am alarmed
I bolded some of the more forthright comments. The intensity of the language that officials, such as the fin min here, use is a precursor to the next step. Dropping in the agreement with the US is also a next step, as she has done here. It hints at co-ordinated intervention, not just from Japan.
Once again I need to mention that the fundamentals are against Japan here. These point to a weaker yen. Actual intervention, when it comes, is likely to be a thin market time window, I've mentioned during Thanksgiving a few times. Keep an eye out.
