Japan's Prime Minister Fumio Kishida spoke at a press conference on Thursday in Tokyo.

In it he addressed the change in monetary policy from the Bank of Japan and reiterated that its appropriate for the Bank to maintain accommodative monetary conditions.

This, of course, leaves open the question of the yen. In a world of still high rates, and a Federal Reserve where the upcoming rate cut seems to be just a few months away, every month, the yen (and CHF) are going to remain as carry currencies and will thus remain under pressure.

Perhaps the answer to the 'what to do about the yen' came from further comments from PM Kishida:

  • government will continue to coordinate closely with the Bank of Japan to ensure wages continue to rise and the economy makes a complete exit from deflation

I'd suggest that the "continue to coordinate closely with the Bank of Japan" also encompasses an implied permit for the Bank to intervene to support JPY. So far we've had verbal intervention, and its become more forthright and intense, for example:

The words used are code, here's a guide:


More from Kishida:

  • "Japan is experiencing a historical chance to make a full exit from deflation. Some people may think that the government can declare that Japan is fully out of deflation. But we're still half way there."
  • "I will promise to ensure wages increase at a pace exceeding the inflation rate next year onward"
usdyen weekly candles intervention 29 March 2024

USD/JPY weekly candles. We are in intervention territory.