USD/JPY consolidates for second consecutive day. The devaluation of the Japanese yen against the US dollar has temporarily halted, as USD/JPY enters a consolidation phase. The current exchange rate stands at 143.47.
The news flow has been relatively neutral, and market reactions have been subdued. However, there is an aspect worth noting.
Masato Kanda has been reappointed as the Vice Finance Minister for International Affairs in Japan for another year. Kanda gained recognition for his role in coordinating interventions worth 65 billion USD last year, during a period of yen depreciation.
This move by Japan sends a clear signal that it is prepared to utilize currency intervention measures if deemed necessary.
Investors hold a strong belief that Japan will refrain from currency interventions unless the yen reaches the threshold of 150 JPY per dollar. While devaluation is still ongoing, it appears that the pace of depreciation no longer instills fear among market participants.