Mr Yen Looking For Stronger Yen
London traders report that Mr Eisuke Sakakibara (aka Mr Yen) mentioned today at a conference that Japanese authorities have dicussed with US authorities the weakness of the USD and possible intervention. One observer after the session asked him to confirm the comments, and he declined as it would not be well received at the MoF. According to these sources the MoF said that if they were to intervene at all it would probably be via EUR/JPY and would probably knock EUR/JPY below 150.00 "quite quickly". According to the same source, there is an increasing agreement among Japanese policy makers that a strong Yen would be beneficial to the Japanese economy inasmuch that it would bring inflation lower, citing concerns domestically over burgeoning inflation rates, expected to be "at least 2% by year-end". "Mr Yen" supposedly has the feeling that Japanese authorities are happy with growth, and that they would not be averse to a sharp appreciation of the Yen; however the last comments from the BoJ were on June 26th when policy board member Nakamura said the growth of Japan's economy will continue to slow for the time being and he acknowledged "uncertainties" that continue to dog the overseas economy, rising inflation, and global financial turmoil that could dramatically impact growth.
Supposedly Mr Yen felt that USD/JPY could slide through "100 or even 90" and would not be a problem for Japanese officials. Observers felt that his conclusions indicate the Yen is too weak vs EUR & GBP. and that the Japanese economy is much sounder and can afford a stronger Yen. USD/JPY has given up most of its overnight gains but has held steady for the past few hours.
