Japan finance minister Suzuki with the attempt at verbal intervention to prop us the yen
- Important for fx to move stably reflecting fundamentals
- Excess fx volatility
undesirable - Won’t rule out any
option, will deal appropriately with fx moves - Watching fx moves
carefully with high sense of urgency - Won’t comment on
whether recent yen moves are excessive
I can’t understand why Suzuki wouldn’t comment “on
whether recent yen moves are excessive”. He is surely missing an opportunity. Market participants understand that when a finance minister says FX moves are excessive its code for “stop selling the currency” (yen in this case) “because I’ll intervene to buy it and you’ll lose money”. Maybe that’s just an empty threat, but it often works. By refusing to comment Suzuki may very well be just inviting further speculation against the JPY.
This article was written by Eamonn Sheridan at www.forexlive.com. Source