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Japan Seen Unlikely to Intervene on Yen With Fed’s Jumbo Hike Looming

  • BOJ’s policy divergence with the Fed is triggering weaker yen
  • Intervention risks showing finance ministry can’t stop tide

Japan has plenty of reasons to avoid directly intervening in currency markets to prop up the yen, especially ahead of the Federal Reserve’s expected rate hike on Wednesday, economists say.

“There’s almost zero chance they would intervene before the Fed’s decision,” said Masaaki Kanno, chief economist at Sony Financial Group, indicating there was even less chance of Japan influencing the direction of the currency when a 50 or 75 basis point U.S. rate increase looms with more to come.