Citi Predicts Japan Intervention at 160 Yen/Dollar

Citi analysts believe that Japan's Ministry of Finance is poised to intervene in currency markets if the yen weakens further against the US dollar. The firm notes that rate checks implemented after the Bank of Japan meeting showed a stronger yen than during the previous intervention.

Citi also suggests that the Japanese government may aim to push the exchange rate down to around 150 per dollar, which is below its current level of around 160 per dollar.

The analysts at Citi do not expect an immediate declaration from the Takaichi government that deflation has ended. Instead, they believe it will be a key indicator in the Monthly Economic Report published by the Cabinet Office.