Japan amps up intervention threat as yen hits lowest since 1990

Bloomberg: Japan had its toughest warning yet for traders on its willingness to intervene in currency markets after the yen slid to its weakest level...

Bloomberg: Japan had its toughest warning yet for traders on its willingness to intervene in currency markets after the yen slid to its weakest level in about 34 years against the dollar.

The nation’s currency dipped to 151.97 versus the greenback early on Wednesday in Tokyo - beyond the level at which policymakers stepped in during October 2022 - before comments from government officials on their readiness to act boosted the yen to its strongest level of the day.

"We are watching market moves with a high sense of urgency,” Finance Minister Shunichi Suzuki said. "We will take bold measures against excessive moves without ruling out any options.” Suzuki’s reference to bold action is generally interpreted to mean direct intervention in the currency market.

Masato Kanda, the top currency official, later reiterated the message that speculative moves in markets wouldn’t be tolerated following a three-way meeting between ministers, the central bank and financial regulator.

The yen’s rapid decline comes even after the Bank of Japan raised interest rates for the first time since 2007. A lack of guidance pointing to further near-term policy tightening, and the central bank’s insistence that financial conditions will remain easy, have instead pushed the yen in the opposite direction - something that traders have jumped on.