USD/JPY quickly down to 119.70 as stops blown out in a drop from 120.40 after the comment.
USDJPY intraday.
The comments are from Koichi Hamada, adviser to Japanese Prime Minister Abe, speaking on BS Fuji TV.
- Yen at 105./USD appropriate given purchasing parity
- Yen at 120 is weak considering purchasing parity
- Consumption will rise in Japan as stocks rise
- Monetary policy is working well in Japan
The market dropped as the comments were carried on Bloomberg. I can't help but wonder if something was lost in translation. Officials often mull purchasing power parity without trying to send signals. The meaning depends on the translation of 'appropriate' and the context.
If it's an attempt to jawbone USD/JPY lower, it wouldn't be the first soft attempt to cap the pair but other efforts came closer to 122.00.
More on Hamada:
Hamada is influential in Abe's govt. Has been called the brains behind Abenomics but he has also criticised yen weakness in the past and it isn't the first time he lamented a weak currency.
In 2013, Hamada said 110 yen per dollar would be "too weak."
