Katayama says that:
- It would be desirable for currencies to move in stable manner reflecting fundamentals
- We are watching market developments closely, prepared to take various measures if needed
- Intervention could be included in various measures as agreed under US-Japan joint statement
- Will keep an eye on any increase in bond yields
The comments above are not anything new. We've heard them all before and many a time in the past two months. When it comes to Japan officials intervening verbally, it is more so on the timing. And this comes after USD/JPY ran higher close to the 158.00 level overnight, the highest point since Tokyo performed 'rate checks' at the end of January.
Despite normally being a safe haven currency, the yen hasn't found any support during the US-Iran conflict. Higher oil prices is one to weigh on the currency as it dampens the Japanese economic outlook. However, market volatility and the potential spillover impact on inflation also appears to be putting off the BOJ from getting to their next rate hike.
USD/JPY is now down 0.3% to 157.30 as traders are heeding caution from Katayama's comments.
