Japan's Katayama warns on one-sided, rapid FX moves, will engage with US Treasury

Japan's Finance Minister Satsuki Katayama issued a fresh warning about sharp moves in the yen. Her remarks are a form of "verbal intervention" that often comes before any action in the currency market.

The FX message

• One-sided moves: the currency market has recently seen one-sided and rapid moves.
• Coordination with the US: Japan will engage with the US Treasury and respond appropriately.
• Summit agreement: the US and Japan reached agreement and coordination on currency policy at their leaders' summit, Katayama said.
• Intervention: she declined to comment on past currency interventions.

Winter subsidies

The government will bring forward utility-bill subsidies for the winter season, using reserve funds.

Why it matters for markets

"One-sided and rapid" is the phrase Japanese officials typically use before intervening, and the stress on coordination with Washington makes the warning more serious. That raises the risk of a sharp reversal in USD/JPY, so traders short the yen should take risk management seriously.

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Source: remarks by Japanese Finance Minister Satsuki Katayama (Ministry of Finance Japan)