Yen Intervention Hinges on Ongoing US-Japan Cooperation

Last week, the US and Japan jointly intervened in FX markets to prop up the Japanese currency. The intervention aimed to counter excessive volatility and disorderly movements in the JPY.

The durability of the recent Yen rebound will depend on whether markets remain confident that joint action by policymakers is not a one-off, Commerzbank's Thu Lan Nguyen said. She argued that 'for the yen to retain its gains, markets must be convinced that coordinated interventions by the BoJ and US authorities will remain on the table going forward.'

The Japanese Finance Minister (FM) Satsuki Katayama also confirmed Japan's willingness to carry out more forex intervention with the US. Meanwhile, the Euro trades broadly calm after the release of the better-than-expected German Industrial Production data for June.