- May conduct market operations to encourage stability in bond market
- May do so in response to irregular market moves and exceptional cases
- Won’t specifically comment on forex levels
- Forex determined by various factors, not just interest rate gap
- Weak yen could inflate import costs and be passed on to domestic prices
- Have to be mindful of the fact that forex could have a larger impact against import costs
He’s sending a subtle message on the bond market and how they might step in to try and help yields come off the boil. However, he’s steering clear of anything related to the Japanese yen currency for now and that is seeing market players start to test the limits once again. USD/JPY is now up 0.3% to 158.90 levels, its highest in a little over a week:
It won’t be long until we have to hear more verbal intervention from Tokyo surely.
All Ueda is saying so far is that policymakers will pay more attention to forex moves but he isn’t hinting at much urgency otherwise to defend the currency if need be. As mentioned earlier here, that is the expected playbook though.
So, the ball is thrown back over to the Ministry of Finance’s court. A “rate check” coming next?
This article was written by Justin Low at investinglive.com.