Citi Warns of Yen Intervention if it Hits 160 Per Dollar

Citi analysts believe Japan's Ministry of Finance is likely to intervene in the foreign exchange market if the yen weakens further, specifically if it reaches around 160 per dollar against the US dollar.

The firm noted that rate checks conducted after the Bank of Japan meeting took place when the yen was stronger than during the previous intervention. Citi added that the Ministry may aim to push the exchange rate down to around 150 per dollar.

Following a recent Cabinet reshuffle, the focus is now on whether the Japanese government declares deflation to have ended. According to Citi, such a declaration is unlikely in the immediate future.