Japan’s Finance Minister Taro Aso signaled that an intervention into the currency market in order to weaken the Japanese yen would not be against the agreement of the Group of Twenty. Unsurprisingly, the yen dropped after such remarks.
Aso said that the G20 agreed to allow an intervention in order to prevent “one-sided” and “speculative” moves:
We would take necessary steps under certain circumstances if one-sided and speculative moves were observed. I believe we can respond in line with the G20 agreement.
The comment led to speculations that the finance minister will order the Bank of Japan to weaken the yen.
The currency also softened due to limited demand for safe assets. While the pessimistic global growth outlook from the International Monetary Fund caused some concerns, market participants felt encouraged by the rally of crude oil, meaning that they preferred to stick to commodity-related currencies.
USD/JPY gained from 107.94 to 108.56 as of 20:46 GMT today. EUR/JPY gained from 123.16 to 123.60, reaching the high of 123.99 intraday. AUD/JPY jumped as much as 1.8% from 81.99 to 83.44.
If you have any questions, comments or opinions regarding the Japanese Yen,
feel free to post them using the commentary form below.
