Eisuke Sakakibara, a former Japanese vice finance minister and aka 'Mr. Yen', spoke to Bloomberg earlier today
- It's going to be a difficult for BOJ governor Kuroda
- Further easing may be necessary and that will be a challenge for the BOJ
- Sees USD/JPY moving lower slowly towards 100 by year-end or next year
- If USD/JPY breaks below 100, that is when BOJ would be concerned
- As that happens, the BOJ should be inclined to introduce further easing policies
- Yen has strengthened very slowly over the past few years
- Usually is a taboo for a country head to talk about the currency
- Relationship between Trump and the Fed has actually improved in the past year
- Both sides have learned to accommodate one another
- In order to perform currency intervention, one needs agreement from the other party
- Yen should strengthen further against the dollar as Trump wants a weaker currency
- Doesn't see the Japanese government being too concerned about that for now
- Doesn't think that we're in the early days of a currency war
Sakakibara earned his name as 'Mr. Yen' during the 90's as he navigated the currency through the Asian financial crisis.
He gave a very candid take during the interview above as well by speaking about how he dealt with Larry Summers when performing currency interventions during that decade.
I reckon the same rules may not apply any more but just something to be mindful about if we ever do reach that stage over the next few years.
His insight on the BOJ and Japanese government stance is also interesting as he sees the 100 level in USD/JPY being the key threshold in which action will then be taken.
