Furusawa Warns of More Yen Intervention as BOJ Rate Hikes Loom

Japan's former top currency diplomat Mitsuhiro Furusawa believes that Tokyo may conduct joint yen intervention at any time, including coordinated action with Washington. He thinks the current level of the yen is 'clearly too weak' and hurting the economy by boosting import costs.

Furusawa notes that Tokyo's previous intervention with Washington drove up the yen to around 155.20 per dollar from a 40-year low of 163.99, but it has since slid back to around 159.50.

He suggests that the Bank of Japan (BOJ) should raise interest rates faster than expected to reverse the yen's downtrend. 'Most market players believe the BOJ will raise rates in September and I think it should,' Furusawa said, adding that what is more crucial is for the central bank to communicate the likelihood of a faster pace of rate hikes.