Forex Flash: Anticipation and anxiety looms on BoJ – Westpac

FXstreet.com (Barcelona) - The countdown continues to one of the most anticipated Bank of Japan meetings in memory, with the decision due next Tuesday. However, the seemingly unstoppable USDJPY rally faltered this week on headlines from an unexpected source. On Tuesday, Japan's economy minister Akira Amari said "he didn't want to see the yen weaken excessively, given its impact on import prices."

The USDJPY reacted sharply, sliding from around 89.60 to as low as 88.62 as Amari was reported to have said that the yen had "corrected" in line with fundamentals, implying that the USDJPY had risen far enough. Soon newswires amended this to "correcting". Of course Amari was not speaking English, so his precise message may have been lost in translation.

Indeed on Thusday, Amari claimed he had been misinterpreted (the USDJPY duly bounced). According to the Westpac Strategy Team, "Amari is probably adjusting to the new reality that his comments will move markets, which hasn't been the case since he was last economy minister, in 2006- 2008. Yet LDP secretary general Ishiba on Wednesday also expressed some misgivings about the extent of JPY decline."