Japanese Monetary Authorities Mull “Plan B” to Stabilize Yen

The yen is under selling pressure again, with rising import costs posing a threat to consumers. Yen hit a 7-month low vs dollar, and reached a 15-year low against euro. A divergence in monetary policy is expected to further strengthen the USD and weaken the JPY. Japan last intervened in October to stem yen weakness. Investors expect intervention if the yen falls to 145 or higher.

Monetary policy divergence between the Bank of Japan (BoJ) and the U.S. Federal Reserve was seen as a main factor driving the dollar's gains, as Japan continued to loosen monetary policy while the Fed tightened aggressively to fight inflation.

Asked whether authorities were ready to intervene in markets, Deputy Finance Minister Masato Kanda in charge of international affairs told reporters: "We can take all options, we don't rule out any options."