Yen Declines as Japan signal possible intervention

After a major strengthening of the Yen for the last few days, and in its center the drop of USDJPY under 90 – a level which is considered  uncomfortable for the Japanese economy – the Japanese finance minister Shoichi Nakagawa said tonight Japan is ready to act in the currency market.

Although not yet an official declaration for an intervention, it is still a clear signal  the Japanese indeed are watching and are ready to react to weaken their currency if necessary.

The last time the Japanese intervene with the Forex market was in 2004.  Back then, the Yen was trading too high for the Japanese taste, and they began selling their own currency by the billions- they eventually  drained the demand for the Yen and consequently pushed it lower.

Follow closely the developments regarding a Japanese intervention, you do not want to be on the wrong side if things start to change.

In addition, take note the Bank of Japan is expected to cut interest rates on the Yen tomorrow (Friday) from 0.3% to 0.1%. This also should affect pairs like USDJPY and EURJPY.

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