Japan Keidanren Chief Tokura: Rapid FX fluctuation not desirable for economy | Forexlive

• Rapid FX fluctuation not desirable for economy.
• Want FX to stabilise as much as possible.

The surging yen is not something that the Japanese are happy about at the moment. There’s a reuters report saying that Japanese officials will push back against any request to boost the yen in trade talks with the US. “Three sources with knowledge of the negotiations” say that Japan sees little scope for direct action such as currency intervention or an immediate rate hike.

A rate hike is definitely off the table for the time being with the market pricing just 14 bps of tightening by year-end. The negative impact on the economy from tariffs uncertainty and the downward pressure on inflation from stronger yen and lower commodity prices will keep the BoJ on the sidelines.