Yen: Verbal intervention will only work so far - BTMU

Analysts at Bank of Tokyo Mitsubishi explained that the sharp strengthening of the yen which has lowered USD/JPY towards key support at the 100-level is once again increasing concern amongst Japanese policymakers.

Key Quotes:

"It has prompted Masatsugu Asakawa, the Vice Minister for International Affairs to state that Japan is closely watching for “speculative” moves in the FX market with a strong sense on concern. He noted that price action could be exaggerated by thin summer markets and warned that if there are extreme FX moves Japan will have to act while keeping in close contact with other G7 nations.

Verbal intervention may help temporarily to dampen yen strength but it will not reverse the stronger yen trend as has been clearly evident so far this year."