Given the continued verbal warnings from Japan’s various “Princes of the Yen” however, USD/JPY bulls will still need to be mindful of possible “snakes” of intervention bringing prices sliding back down.
On Tuesday, Bank of Japan (BoJ) Governor Katzuo Ueda once again repeated that excessive Yen moves are undesirable. However, he added that he was closely monitoring how the weak Yen affected “prices”.
Analysts at BBH point out that this marks a 180 degree pivot for Ueda who said after the April 26 BoJ meeting, that a weak Yen was “not having a big impact on underlying prices yet”.
His blunder after the BoJ meeting led to “further yen weakness and so Ueda seems to be doing some damage control,” BBH added.
Ueda’s change of tone may be designed to appease certain business groups who are not happy with a weak Yen. The chairman of Japan’s Keidanren business lobby, Masakazu Tokura, said recently, the Yen is too weak beyond 150 to the Dollar.
Further, top currency diplomat Masato Kanda also repeated his usual warning that the government will respond appropriately if there are excessive or disorderly movements in the FX market.
All in all it suggests many reasons why the Japanese authorities are still probably ready to pull the trigger on further intervention, suggesting USD/JPY's ride higher could continue to be a bumpy one
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