A senior official of Japan’s Ministry of Finance said that the government will take all possible measures as needed to deal with speculative behavior in the market. This is another warning as the yen and oil prices have been under pressure due to the conflict in the Middle East.
Some market participants have said that speculative fluctuations in crude oil futures are affecting the foreign exchange market, Deputy Minister of Finance for International Affairs Atsushi Mizukubo told reporters on Monday. “Given the impact of exchange rate fluctuations on the economy and people’s daily lives, the government will take all possible measures at any time,” he said.
Sanmu said that the authorities are ready to take action “in all aspects”, suggesting that they might look beyond the currency market to other areas, including crude oil futures. At the beginning of this month, the US government had discussed intervening in crude oil futures to curb the soaring prices caused by the war in Iran, but Treasury Secretary Scott Bessent denied the plan last week.
Miyamura’s warning indicates that the Japanese government is prepared to consider a series of measures to deal with exchange rate fluctuations. Besides direct market intervention, in recent years, the authorities have adopted a variety of strategies to curb speculative behavior, including coordinating with US authorities for exchange rate checks and holding tripartite talks among senior officials of the Bank of Japan, the Ministry of Finance and the Financial Services Agency.
In 2024, when the exchange rate of the Japanese yen against the US dollar fell below the 160-yen mark, the Japanese authorities intervened on multiple occasions to support the yen.
Sanmu pointed out that speculative activities in crude oil futures are one of the factors behind the recent exchange rate fluctuations, citing market views. Since March 6, the benchmark U.S. WTI crude oil price has mostly fluctuated at or above $90 per barrel.
Japan imports about 90% of its oil from the Middle East, and the long-term conflicts in the region may exacerbate domestic inflation. According to data from Japan’s Ministry of Economy, Trade and Industry, as of last week, the price of gasoline has soared to a record high of 190.8 yen per liter.
The government has decided to provide subsidies to oil refineries from last week to keep the price of gasoline at around 170 yen per liter. The government will also take similar measures for other fuels, including diesel, heavy oil and kerosene.
Technical analysis:
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Gold: Recently, due to the uncertainty of war factors, the price has been under pressure and dropped to around 4400, with the lowest point in the morning reaching 4318. Our long-term view on the price factors remains unchanged, but short-term factors are beyond human control. It is recommended to wait for a more stable situation to form on the technical side before considering a rebound. For today, it is suggested to wait and observe until the converging breakout pattern is established. For detailed positions, please consult the plugin.
(Gold 15-minute chart)
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The Nasdaq: The price continues to follow a downward trend. After opening lower in the morning, it is currently consolidating around 23,850. Due to the uncontrollable factors of the war, it is temporarily recommended to observe or wait for a clear stabilization signal in the technical pattern before catching short-term rebounds. For detailed positions, please consult the plugin.
(NASDAQ 15-minute chart)
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Crude oil: The price has been continuously testing above the 100 mark, but it has not yet been able to firmly stand above it. For today, continue to use the 100/101 mark as the dividing line between bulls and bears for observation. Operationally, you can wait for now. After the bulls and bears have completed their battle, then proceed with trend-following operations. For detailed positions, please consult the plugin.
(Crude Oil 15-Minute Chart)
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