Citi Warns Yen Intervention Likely Near 160 Per Dollar

Citi's analysts believe that Japan's Ministry of Finance is likely to intervene in the currency market if the yen weakens to around 160 per dollar against the US greenback.

The firm pointed out that rate checks implemented after the Bank of Japan meeting occurred when the yen was stronger than it was during the previous intervention. This suggests that the ministry may aim to push the exchange rate down to around 150 per dollar, a target that Citi mentioned.

With the Takaichi government's Cabinet reshuffle complete, attention is now focused on whether Japan will declare an end to deflation. However, Citi does not expect this declaration to come immediately, and the key will be how the government's stance on deflation changes in the Monthly Economic Report published by the Cabinet Office.