Katayama’s remarks keep the threat of intervention in the background without signalling that action is imminent, and the yen’s weakness on the session suggests markets see little immediate deterrent. Her refusal to judge current levels, and her comment that conditions have improved, read as a holding pattern rather than an escalation in verbal warnings. Pointing to the joint statement with the US is a reminder that Tokyo believes it has room to act if moves become disorderly, which may make traders more cautious about pushing the yen sharply lower in a short period. A weaker currency also adds to import costs at a time when Japanese manufacturers are already reporting firmer input price inflation.
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Katayama reminded markets that Tokyo still has the intervention option, and US backing for it, but gave traders no line in the sand, and the yen slipped anyway.
Summary:
Japanese Finance Minister Satsuki Katayama said a joint foreign exchange statement with the US remains in effect and that Tokyo will act against disorderly currency moves
She declined to comment on specific exchange rate levels or say whether current levels are good or bad
Katayama noted that Prime Minister Takaichi has said yen undervaluation is problematic, and stressed the importance of stable markets
She said conditions have improved compared with earlier, while repeating the need to avoid disorderly movements
Katayama also pledged to estimate tax revenue accurately and with greater transparency
The yen was weaker on the session so far
Japanese Finance Minister Satsuki Katayama said on Sunday that a joint foreign exchange statement with the US remains in effect and that Tokyo will take action against disorderly currency moves, keeping the prospect of intervention in place as the yen weakened.
Katayama declined to comment on specific exchange rate levels and said she could not describe current levels as either good or bad. She stressed the importance of stable currency markets and the need to avoid disorderly movements. She also said conditions had improved compared with earlier, without elaborating.
The minister noted that Prime Minister Takaichi has described yen undervaluation as problematic, a reminder that concern about the currency’s weakness extends to the top of the government. Her reference to the joint statement with Washington signals that Tokyo regards its intervention option as one the US accepts, should moves become excessive.
The comments stopped short of an escalation in Japan’s verbal warnings. By avoiding any judgement on levels and pointing to improved conditions, Katayama signalled vigilance rather than imminent action. The yen was weaker on the session, suggesting markets did not see the remarks as a strong deterrent.
The remarks come as a weak currency adds to cost pressures facing Japanese companies. A manufacturing survey released on Monday showed input price inflation picking up for the first time in five months, which firms linked to higher costs for oil, raw materials and components.
Katayama also addressed fiscal policy , pledging that the government would do its best to estimate tax revenue accurately and with greater transparency. That commitment comes as parliament debates proposals to cut the consumption tax on food and introduce a new income-linked benefit for low-income workers, measures that have kept Japan’s fiscal outlook under scrutiny.
The key test for markets will be whether yen weakness accelerates. Tokyo has tied any action to the pace and disorderliness of moves rather than to a particular level, so a sharp, rapid decline would be more likely to prompt intervention than a gradual drift.
This article was written by Eamonn Sheridan at investinglive.com.
