Yen Stabilizes as Japan Vows to Counter Currency Drop

USDJPY Analysis—Finance Minister Shunichi Suzuki said the Japanese yen has stabilized at around 151.4. He has been vocal about preventing sudden drops in the currency’s value, stating that the authorities are keeping a close eye on the market and are prepared to take any necessary action.

Suzuki pointed out that the yen’s recent fluctuations can be attributed to local and international factors. However, he also mentioned that some of these changes might be due to speculative trading that doesn’t align with the underlying economic fundamentals.

These remarks followed a meeting between officials from Japan’s Ministry of Finance, the Bank of Japan, and the Financial Services Agency, which focused on the yen’s decline. The decline was partly driven by expectations that the Bank of Japan’s monetary policy would remain lenient, even as there’s been a slight shift away from negative interest rates.

Additionally, the Bank of Japan’s latest Tankan survey revealed a drop in confidence among Japan’s large manufacturers, decreasing to +11 in the first quarter from a revised +13 in the last quarter of the previous year. The survey also suggests a potential further decrease in manufacturing optimism to +10 for the next quarter.

Yen Stabilizes as Japan Vows to Counter Currency Drop