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Japanese Finance Minister Shunichi Suzuki said on Friday that he aims to achieve the primary balance goal. He further stated that he will keep an eye on China’s excess production on the Japanese economy.  Key quotes Aims to achieve primary balance goal.  Will monitor the impact of China’s excess production on the Japanese economy. Poised to soon officially announce new sanction package against Russia. Does not comment on G7 talks on China overcapacity. Warns of possible deflationary pressure due to overcapacity in China.   Market reaction  At the time of writing, USD/JPY is trading 0.12% higher on the day to trade at 157.22. Japanese Yen FAQs The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors. One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The current BoJ ultra-loose monetary policy, based on massive stimulus to the economy, has caused the Yen to depreciate against its main currency peers. This process has exacerbated more recently due to an increasing policy divergence between the Bank of Japan and other main central banks, which have opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supports a widening of the differential between the 10-year US and Japanese…

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Filed under: News - @ June 14, 2024 2:24 am