Japan's MOF in quandary over USD/JPY moves
April 23 (Reuters) -Japan's Ministry of Finance facesa quandary asrecent USD/JPY moves may be deemed"excessive" but the market isnot necessarily "disorderly", two points Finance Minister Shunichi Suzuki and Vice Minister Masato Kanda have repeatedly stressed nP8N3EL04Q, nP8N3GE008, nT9N3ET01P.
MOF FX intervention has almost always hingedon "excessive" and "disorderly" moves. This was the case in the fall of 2022 and previous interventions - and undoubtedly remains so in the eyes of market participants.
Recent USD/JPY moves may have been viewedas "excessive" by Japanesepolicymakers and especially importers who are facing much higher costs. Even exporters have been affected byhigher costs of raw materials they import in addition to supply chain bottlenecks.
But the markets have not necessarily been "disorderly". The break above 152.00, a perceived ceiling untilApril 10, did see USD/JPY spurt higher, pausing for a bit ahead of 153.50 before movingup towards 155.00 on April 15.
The breach of 152.00 took outlarge option-related stops, fuelling the move. Some stops are likely to have been taken out above 153.50 too. YetMOF did not move.
Some speculators, betting on intervention after the 152.00 break, have since been saddled with unwanted short positions. Japanese retail players toohave been saddled with JPY shorts. Position additions and USD/JPY short-covering from these players have helped buoy the pair, especially on dips, and this could remain the case barring amajor downside retracement.
The price of no MOF intervention above 155.00 could be high with little in the way of technical resistance until daily, weekly and monthly highs dating back towards the 155.77 high in June 1990 and the high for 1990 of 160.35 in April.
Related comments nL2N3GQ04H, [nL2N3GL04J nL2N3GE04H. For more click on FXBUZ
USD/JPY: https://tmsnrt.rs/3JtrYQK
USD/JPY monthly: https://tmsnrt.rs/3Ub3rVF
Japan's history of supporting yen Japan's history of supporting yen: https://tmsnrt.rs/3qVyp5Y
Haruya Ida is a Reuters market analyst. The views expressed are his own. Editing by Sonali Desai
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