Japan's Top FX Official Says Yen Moves Too Fast, Tells Markets Not to Forget Summer Intervention

Japan's top foreign exchange official Atsushi Mimura warned that yen moves had been too rapid and suggested authorities were prepared to intervene again to support the currency. According to Sina Finance, Mimura told reporters Thursday, “I strongly feel that exchange-rate moves have been too fast over the past few days,” adding that “it is too early to forget what happened this summer”; he declined to comment on specific exchange-rate levels. The yen was approaching 160 per dollar. After it breached that level this summer, Japanese authorities intervened to support the currency, with the monthly intervention total reaching a record; some operations were conducted jointly with the United States. Over the past two days, stronger-than-expected U.S. inflation data and hawkish remarks from Federal Reserve officials boosted expectations that the Fed would resume raising rates next month, and the yen fell from around 158 to nearly 160 per dollar. The exchange rate was around 159.8. The yen has come under renewed pressure amid the possibility of a wider U.S.-Japan interest-rate gap. After hawkish comments from Fed officials, traders began pricing in a small chance of a 50-basis-point rate hike in December. U.S. core CPI inflation exceeded expectations for three consecutive months, reinforcing expectations of further Fed tightening. Markets have largely priced in a Bank of Japan rate hike at its December 18-19 meeting, but the timing of subsequent increases remains unclear.