Japan's finance minister Katayama said the principles behind the July US-Japan
joint FX intervention remains in effect, signaling the government is prepared to
act again with the United States if needed. The remarks helped the yen end a
four-day losing streak. Last week's Bank of Japan rate hike to a 31-year high
has not convinced investors that the central bank will accelerate tightening, leaving
sentiment fragile. HSBC senior FX strategist Daragh Maher said the yen may
struggle in coming weeks but the persistent threat of intervention should help
limit USD/JPY upside. He added that early-September's yen spike has reversed
and, with positions less extreme, another large short-covering squeeze is
unlikely.
