Japan and US Pledge to Intervene Again if Yen Continues Slide

A former Bank of Japan official has revealed that the recent joint intervention by Japan and the US to stabilize the yen was highly effective in pushing back against market expectations.

Takashi Takeuchi, a former BOJ executive director, stated that the fact the US stood behind Japan and took action had a huge symbolic meaning, indicating there are effectively no constraints preventing Japanese authorities from intervening.

Takeuchi emphasized that if the yen shows signs of drifting lower again, both sides will certainly intervene once more. The risk of further sharp weakening has diminished significantly, according to him.

In the short term, Takeuchi sees a range around 155-162 for USD/JPY, but warns that unless fundamentals corroborate this, it may be difficult for the intervention to sustain itself in the long run.