A former Japanese official: Japan may not intervene until the yen breaks through 155

A former Japanese Finance Ministry official, Hiroshi Watanabe, told Reuters in an interview that the Japanese authorities may not intervene in the foreign exchange market unless the yen falls below 155 against the dollar.

The yen hasremained weak, recently slipping to around 152, where the authorities intervened in 2022. Watanabe believes that the possibility of current intervention is small because the yen's decline has been within a range and not as severe as in 2022.

Watanabe said that while the market may be watching whether the dollar will rise above 152 yen, the Japanese authorities may not see a break through this level as a sufficient reason to intervene in the market. However, 155 would be an important psychological price level, and a break through this level would attract a lot of media attention, thereby increasing the possibility of intervention, especially if the yen falls sharply.

He also said that as the Bank of Japan may defer significant rate hikes, Japan's borrowing costs will remain low, putting downward pressure on the yen.

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