Japan Readies Yen Intervention as BOJ Hikes Loom on Currency Downtrend

Japan's former top currency diplomat Mitsuhiro Furusawa believes the country may conduct joint yen intervention 'at any time' and signal faster-than-expected interest rate hikes from the Bank of Japan (BOJ) to stem the currency's falls.

The yen is currently trading at around 159.50 per US dollar, after a coordinated intervention with Washington in July drove it up to 155.20. Furusawa said that Tokyo and Washington could step in again if the yen returns to levels hit before their joint intervention.

'It is probably not a matter of intervening specifically at, say, 160 or 162 yen per (US) dollar,' he told Reuters. 'But intervention could take place again at any time, including coordinated action with the United States.'

Furusawa also emphasized that faster rate hikes by the BOJ are necessary to reverse the yen's downtrend. He believes most market players share this view and thinks it is crucial for the central bank to communicate the likelihood of a faster pace of rate hikes.