After the yen broke through a key threshold, Japan’s top currency official issued the strongest warning yet to speculators, saying that if the current situation persists, authorities may need to take bold action in the foreign exchange market.
“We are increasingly concerned that speculative activities are intensifying not only in the crude oil futures market but also in the foreign exchange market,” Deputy Finance Minister Atsushi Mizuno, who is in charge of international affairs, told reporters on Monday. “If this situation continues, we believe that it may soon be necessary to take decisive action,” he said.
Miyamae made the remarks after the yen fell below the 160-yen-per-dollar mark last weekend, the lowest level since Japan’s market intervention in July 2024. The yen strengthened after Miyamae’s remarks, rebounding to 159.85 yen from a low of 160.46 yen in early trading.
He said, “We are fully prepared to deal with all aspects. Our focus is broad and comprehensive.” This indicates that the government is not only closely monitoring the foreign exchange market but also the crude oil futures market. Last week, the government hinted that it might intervene in the oil market to indirectly support the depreciation of the yen.
The remarks of Bank of Japan Governor Masaru Hayami in the Diet may also support the yen, as he has intensified the concerns of Japan’s top policymakers over the yen’s exchange rate.
Since the end of last year, Japanese Finance Minister Masayuki Kanda has repeatedly mentioned the possibility of taking “bold actions” – a phrase widely interpreted as a signal of intervention. However, since taking office in July 2024, Tsuneo Mihara has not used this term. Therefore, when the Japanese foreign exchange chief utters this phrase, it can be regarded as the final warning before actual intervention to support the yen’s exchange rate.
In addition, Kishida will meet with finance and energy ministers of the Group of Seven on Monday, when she may discuss the matter with her counterparts. She said last week that global policymakers are increasingly concerned about recent market volatility.
Any decision to enter the market will be made by the Ministry of Finance. The Bank of Japan will then assist in implementing the action in accordance with the instructions of the Ministry of Finance.
Technical analysis:
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Gold: Last Friday, the yellow zone low-sweep liquidity we provided by the plugin to catch the rebound was highly effective. With a 15-dollar stop-loss space, we gained a 130-dollar profit space. The price pulled back to the 4110/20 demand zone during the day and then rose again. We hope to see a new round of sideways consolidation before considering going long after an upward breakout. For detailed positions, please consult the plugin.
(Gold 15-minute chart)
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The Nasdaq: With no easing of geopolitical tensions and oil prices returning above $100, the Nasdaq has further declined below 23,000. The price has moderately rebounded intraday to around the 23,100 level, but there are no signs of improvement in the trend. It is recommended to continue observing and wait for further signals of price stabilization. For detailed positions, please consult the plugin.
(NASDAQ 15-minute chart)
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Crude oil: The geopolitical situation continued to heat up over the weekend, with WTI rising above 103. However, on Monday, the price began to fall after a brief rally. For the day, we will continue to watch for short signals after a rebound and liquidity sweep near 103. For detailed positions, please consult the plugin.
(Crude Oil 15-Minute Chart)
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Today’s key financial data and events to focus on:
17:00 Eurozone March Consumer Confidence Index
17:00 Eurozone Industrial Sentiment Index for March
20:00 Germany’s preliminary consumer price index for March
22:30 US Dallas Fed Manufacturing Index for March
