Japan’s Ito says authorities are trying to place a 160 ceiling on USD/JPY

Takatoshi Ito is currently an academic at Columbia University academic:

  • was deputy vice minister for international affairs at Japan’s finance ministry from 1999-2001
  • was a private-sector member of the government’s top economic council for two years until 2008

He spoke with Reuters:

  • “By hammering speculative moves with intervention, the
    authorities are trying to generate market expectations that 160
    could be the dollar/yen’s ceiling”
  • “When the yen’s decline is proceeding gradually reflecting
    interest-rate differentials, it’s hard to change the trend with
    currency intervention,” Ito said. “If the yen’s weakness continues and has a pass-through on
    inflation, two rate hikes by end-year could become an option for
    the BOJ,”
  • “There’s a chance the BOJ could raise rates again this
    autumn at the earliest, and push the short-term policy rate to
    0.5% by year-end”

This guy is probably better placed than most to nominate a potential ‘line in the sand’. Says 160. It was above there on Monday that the BoJ first intervened so he may be onto something.

Update:

This article was written by Eamonn Sheridan at www.forexlive.com. Source