A twofer. First up Asia Times via MENAFN, April 7:
TOKYO - The Japanese capital is seeing a bull market in deja vu as policymakers man the battle stations against speculators dumping the yen.
With the Japanese currency on the verge of slipping to the psychologically important 160 to the dollar level, Ministry of Finance officials are pulling out all the stops to keep it from falling further.
Good luck with that, as traders buzz about the yen plummeting to 170, 180 or even the almost-unthinkable 200 level.
This foreign exchange battle comes at the worst possible moment for Japan, which is already grappling with stagflation. With crude oil around US$115 per barrel, Japan's $4.2 trillion economy is uniquely at risk as the Iran war goes awry. Roughly 95% of Japan's oil comes from the Middle East.
As the yen ratchets lower, the risk of higher imported inflation ticks higher. This dynamic worsens as high energy costs food, transportation, and a wide range of industrial goods.
Yet Japanese Prime Minister Sanae Takaichi has another problem - one nearly three decades in the making. Since around 1997, the most consistent policy across the 15 premierships has been prioritizing a weak yen through quantitative easing.
This week, 10-year JGB yields once again returned to 1999 highs as so-called“bong vigilantes” have Tokyo squarely in their sights. That has Japanese Finance Minister Satsuki Katayama pledging to work with G7 countries as the war in Iran sends global bond yields skyward.
Katayama notes that G7 finance ministers and central bankers have“shared views that developments in the Middle East and sharp fluctuations in oil prices are having a broad impact on markets.”
She added that“our stance has been that we will continue to stay in close contact (with G7 officials ) and ensure that we clearly communicate our message.”
Yet the spike in JGB yields also reflects fears about Takaichi's pre-Iran war fiscal priorities, including budget-busting tax cuts....
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And from Nikkei Asia, April 30:
Yen breaches 160 to dollar; JGB yields surge to highest in nearly 3 decades
Hormuz blockade fuels higher oil prices and inflation fears, putting pressure on BOJ
TOKYO -- The yen weakened past a psychologically significant threshold of 160 to the dollar, and long-term Japanese government bond (JGB) yields surged to 2.5% on Thursday as fears grew over the consequences of inflation fueled by a deepening energy crisis brought on by the prolonged war in the Middle East.
In early-morning trading, the yen was down 0.4% at around 160.17 against the dollar. The Japanese currency fell to 160.48 per dollar during Wednesday trading in New York, its lowest level in 21 months as investors sought haven assets like the greenback.
The depreciation has raised speculation that Japan's financial authorities might intervene to prop up the yen.
The dollar rallied amid a dearth of signs that U.S.-Iran tensions might be easing and as repercussions from the war are expected to complicate monetary policy management.
U.S. President Donald Trump on Wednesday signaled that the Strait of Hormuz blockade will continue until an agreement is reached with Iran. He told U.S. news outlet Axios, "The blockade is somewhat more effective than the bombing. They are choking like a stuffed pig. And it is going to be worse for them. They can't have a nuclear weapon."
The president also posted on social media the same day, saying Iran "can't get their act together. They don't know how to sign a nonnuclear deal. They better get smart soon!"
The globe has had its supply of energy disrupted since the U.S. and Israel's war with Iran broke out on Feb. 28.
Crude prices spiked anew on Thursday, with Brent climbing to its highest price since 2022, up over 7%, while those for West Texas Intermediate were higher by 6%.
Dollar buying also accelerated as more investors expect elevated oil prices linked to the Iran war to delay U.S. interest rate cuts. On Wednesday, the Federal Reserve held interest rates steady in its most divided decision since 1992....
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If interested see also April 28's Capital Markets: "Three Dissents in Favor of a Rate Hike Fail to Support the Yen"