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JPY: Yen Steadies As Govt Official States PM Didn't Make Specific BoJ Request

JPY
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USD/JPY is off earlier highs, the pair last near 146.85/90, around 0.30% weaker in yen terms. Earlier highs were at 147.24, which was just a shade above early Sep highs. We have stabilized somewhat though post the Tokyo fix, while comments from government officials and the BoJ's Noguchi have also crossed. 

  • Cabinet Secretary Hayashi has stated that yesterday's meeting between new PM Ishiba and BoJ Governor Ueda didn't result in the PM making a specific policy request to the BoJ Governor. This came after headlines emerged from the PM yesterday that now is not the time for further policy hikes.
  • Hayashi stated policy specifics are left to the BoJ and that government and BoJ cooperation is driven by the accord.
  • Board member Noguchi appears to be largely reiterating current core BoJ thinking. Easy financial conditions need to be maintained, whilst also assessing the public's belief in achieving 2% inflation target (something that will take time). The door is still ajar for further policy adjustments, but the above doesn't suggest any near term urgency.
  • In terms of further upside focus for USD/JPY, the 148.05 level, Aug 19 high may be the next upside target.
  • Not surprisingly, yen trades have dominated the FX options space so far this morning. A notional 100mln yen put (with 150.00 strike, Oct 17 expiry) went through but other reasonable transaction sizes for yen calls have also gone through.
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USD/JPY is off earlier highs, the pair last near 146.85/90, around 0.30% weaker in yen terms. Earlier highs were at 147.24, which was just a shade above early Sep highs. We have stabilized somewhat though post the Tokyo fix, while comments from government officials and the BoJ's Noguchi have also crossed. 

  • Cabinet Secretary Hayashi has stated that yesterday's meeting between new PM Ishiba and BoJ Governor Ueda didn't result in the PM making a specific policy request to the BoJ Governor. This came after headlines emerged from the PM yesterday that now is not the time for further policy hikes.
  • Hayashi stated policy specifics are left to the BoJ and that government and BoJ cooperation is driven by the accord.
  • Board member Noguchi appears to be largely reiterating current core BoJ thinking. Easy financial conditions need to be maintained, whilst also assessing the public's belief in achieving 2% inflation target (something that will take time). The door is still ajar for further policy adjustments, but the above doesn't suggest any near term urgency.
  • In terms of further upside focus for USD/JPY, the 148.05 level, Aug 19 high may be the next upside target.
  • Not surprisingly, yen trades have dominated the FX options space so far this morning. A notional 100mln yen put (with 150.00 strike, Oct 17 expiry) went through but other reasonable transaction sizes for yen calls have also gone through.