Japan's Finance Minister Taro Aso, previously known for making verbal threats to currency intervention surprised the markets earlier today by taking a complete U-turn. Speaking to reporters earlier this morning, Aso said that the Japanese government had no intention to resort to foreign exchange manipulation. Japanese officials have come under increasing pressure from Washington on their currency intervention policies. Joining ranks were also officials from the European Union who urged Japanese officials to take a step back from their mandate.
Eisuke Sakakibara, an ex-official at the Ministry of Finance said that BoJ officials could intervene in the markets should the dollar fall to 100 Yen or lower. He explicitly ruled out any currency interventions above this level, noting that Japanese officials could get the go ahead from Washington when the yen edges closer to their target. The Bank of Japan left monetary policy unchanged at its meeting last week as Governor Kuroda pushed back expectations of reaching the 2.00% inflation target rate anytime soon. Earlier this week the IMF said that Japan's 2.0% target rate was too rigid, and that achieving balance through Abenomics would require a coordinated policy upgrade - including fiscal stimulus.
Yen Weakens As Officials Rule Out Intervention
Market Trends - 21/06/2016