Japan Signals Action on Yen Near 160, Avoiding Pressure on $1.4 Trillion Treasury Holdings
Updated
Updated · Reuters · May 19
Japan Signals Action on Yen Near 160, Avoiding Pressure on $1.4 Trillion Treasury Holdings
12 articles · Updated · Reuters · May 19
Satsuki Katayama said Japan can respond "at any time" to excessive FX volatility as the yen has slid back toward 160 per dollar, a level markets see as Tokyo's intervention trigger.
Nearly 10 trillion yen in suspected yen-buying since April 30 has failed to hold the currency's rebound, with the finance minister citing oil-price swings, Middle East tensions and speculation as drivers.
Officials said any dollar-selling intervention would be structured to avoid lifting U.S. Treasury yields, because selling reserve assets could strengthen the dollar and blunt Japan's own support for the yen.
Japan says it has enough liquidity in its roughly $1.4 trillion reserves—through cash, maturing assets and interest income—to intervene without relying on Treasury sales, a sensitivity sharpened by rising U.S. yields.
Is Japan's warning against selling US bonds a bluff, while it secretly benefits from a weak yen to boost its economy?
With interventions failing, what is Japan's hidden strategy to win its escalating battle against currency speculators?