The Japanese yen has risen to post World War II highs causing government officials in Japan to get ready for additional intervention. The export market and domestic job creation could be stifled further if the yen continues to strengthen.
CurrencyShares Japanese Yen Trust (FXY), which follows the yen’s movement against the U.S. dollar, is at a new high of nearly $130 a share. Other exchange traded products tracking the yen include WisdomTree Dreyfus Japanese Yen (JYF) and iPath JPY/USD Exchange Rate ETN (JYN).
Finance Minister Yoshihiko Noda said Japan will not exclude any measures to deal with the appreciating currency, report William Sposato and Megumi Fujikawa for The Wall Street Journal.
“Currency investors are fully ready for Japan’s intervention; we’ll get set from Monday early morning,” said Yuji Saito, foreign exchange market director at Crédit Agricole in Tokyo.
For any moves in intervention to be successful, the Bank of Japan must be ready to accompany the government in any action, say analysts. The BOJ has a policy meeting on Sept. 6-7 but may meet sooner if action is needed.
The dollar hit a low of 75.94 yen on Friday, but managed to rebound to 76.55 yen later in trading. Japan had staged an intervention of 4.6 trillion yen on Aug.4 to bring the currency lower. The fears of Europe’s sovereign debt crisis are still an issue and the credit downgrade of the U.S. has caused discomfort in the markets, causing investors to find safety in the yen.
CurrencyShares Japanese Yen Trust