Tuesday, November 15, 2011

Will the Japanese Government Intervene to Weaken the JPY?

In a speech earlier today, Japanese Finance Minister Azumi suggested the BoJ will respond in an appropriate manner to continued JPY strength. 

Azumi was also quoted last Friday as saying, “We have responded to excessive currency market moves to protect our national interest”.

He added that he is watching the market closely for speculative moves. The Japanese Ministry of Finance has increased their comments regarding a strong JPY, something the government has previously done before intervening in the foreign exchange market.
The JPY continues to strengthen versus both the EUR and the USD with the EUR/JPY falling to a one month low near 104.00. There is currently a lack of support on the daily chart and the pair could test the October low of 100.75. The USD/JPY has come under pressure and has an initial support at Monday’s low of 76.80 followed by the all-time low at 75.50.