Reuters is reporting:
- Japanese authorities are likely to intervene in the currency market if the yen falls well below 152 per dollar, according to former top currency diplomat Tatsuo Yamazaki.
- Intervention may occur once the dollar climbs above 152 yen to prevent an accelerated rise, potentially putting authorities' credibility at risk if left unattended.
- Recent descriptions of yen declines as driven by "speculative moves" indicate serious contemplation by authorities on whether to intervene.
Yamazaki oversaw a significant intervention campaign in 2003-2004, suggesting Tokyo likely wouldn't face significant opposition for intervening to support the yen, as it wouldn't unfairly benefit Japan's exports.
The yen has been on a downtrend, even after the Bank of Japan ended eight years of negative interest rates, due to dovish signals indicating further rate hikes may be delayed. Recall, the markets alertness for potential intervention by Tokyo is high as the dollar nears a 34-year high of 151.975 yen.
Earlier, Finance Minister Shunichi Suzuki indicated readiness to counter speculators, hinting at possible yen-buying intervention.
Yamazaki previously criticized the Bank of Japan's governor for giving speculators an excuse to sell the yen due to a lack of clear messaging on interest rate hikes, suggesting a more assertive stance could deter yen bears
