The Japanese yen surged 0.4% for no apparent reason as currency traders try to decipher whether Japan will intervene in the currency market. Some traders pointed to an interview published on The Financial Times today with Masatsugu Asakawa, Japan’s vice minister of finance for international affairs, an influential figure that may also sway the yen. “Mr Asakawa is the senior official in charge of currency policy — and since Japan thinks yen intervention is a legitimate tool of public policy, he has formidable power,” wrote the FT.
Japan’s Finance Minister Taro Aso already told the media that the yen’s trading can be considered disorderly if it moves by 5 yen over two days in either direction; in other words, ground for yen intervention.
Reuter’s said that while Japanese officials have publicly railed against the yen's rapid appreciation to 18-month highs earlier this month, some economic policymakers have told Reuters they are not so worried that the yen will derail efforts to revive exports and the economy.
In addition to talk of currency intervention, investors have been eager for any developments about the timing of Japan's sales tax increase.
Japanese Finance Minister Taro Aso said on Wednesday that he told his G7 counterparts at a finance leaders' meeting last week that Japan will raise the tax as planned. But he did not say whether that meant Japan has officially pledged to the international community that it will go ahead with the increase.