Yen Rises After Japan PM Takaichi's Intervention Warning

(RTTNews) - The Japanese yen strengthened against other major currencies in the European session on Wednesday, after Japanese Prime Minister Sanae Takaichi issued a warning that the government might intervene in the foreign exchange market at any time.

Although it is yet unclear whether the Bank of Japan (BoJ) has fully intervened, the increase in the Japanese Yen appears to be backed by verbal involvement from the nation's senior leaders.

According to an NHK story, Japan's Takaichi declared that the government "will respond appropriately any time on Forex," albeit there has been no proof.

In recent weeks, a number of Japanese officials have declared that an intervention is very likely, although they have never mentioned the extent of the action.

Last week, Satsuki Katayama, Japan's Finance Minister (FM), also issued a warning that if there is excessive volatility or speculative trading activity in the foreign exchange market, authorities may step in.

The Bank of Japan (BoJ) Governor Kazuo Ueda made hawkish remarks about the outlook for monetary policy, which may have contributed to the rapid increase in the value of the yen. Ueda stated, "Our basic stance is to continue raising policy rates in accordance with economic, price, and financial developments."

In the European trading today, the yen rose to 6-day highs of 185.11 against the euro, 201.98 against the Swiss franc and 115.05 against the Canadian dollar, from early lows of 186.01, 203.05 and 115.58, respectively. If the yen extends its uptrend it is likely to find resistance around 182.00 against the euro, 200.00 against the franc and 113.00 against the loonie.

Against the pound and the U.S. dollar, the yen advanced to 2-day highs of 214.43 and 159.37 from early lows of 215.38 and 160.00, respectively. The yen may test resistance around 211.00 against the pound and 158.00 against the greenback.

Looking ahead, U.S. MBA mortgage approvals data, U.S. ADP employment data for May, Canada labor productivity for the first quarter, U.S. and Canada S&P Global PMI reports for May, U.S. factory orders for April and U.S. weekly EIA crude oil data are slated for release.