Takatoshi Ito is currently an academic at Columbia University:
- served as Deputy Deputy Minister of International Affairs at the Japanese Ministry of Finance from 1999 to 2001
- served as a private sector member of the government’s highest economic council for two years until 2008
He spoke to Reuters:
- “By hammering speculative movements through intervention, the authorities are trying to generate market expectations that 160 could be the dollar/yen ceiling”
“As the yen’s decline continues gradually, reflecting interest rate differentials, it is difficult to change the trend through monetary intervention,” Ito said. “If yen weakness continues and impacts inflation, two rate hikes by the end of the year could become an option for the BoJ,”
“It is possible that the BoJ will raise rates again this fall at the earliest and push the short-term policy rate to 0.5% by the end of the year.”
This guy is probably better placed than most to point out a potential “line in the sand.” Said 160. This is where the BoJ first intervened on Monday, so he may be on to something.
Update:
This article was written by Eamonn Sheridan at www.forexlive.com.
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