JPY flows: JPY hitting new lows after Katayama press conference

Japanese Finance minister Katayama’s comments after her meeting with BoJ governor Ueda didn’t provide any comfort to JPY bulls. She said there was no specific discussion of FX, and while she said she had no problem with Ueda’s stance on policy, there appears to be little effort being made to prevent further JPY declines. The JPY has hit its lowest since January against then USD and another all time low against the EUR in response. Sooner or later the administration will need to realise that unless they take action, the JPY isn’t going to stop declining. The only other chance looks like being a weak US employment report tomorrow that triggers general USD losses, but even that may not help the JPY on the crosses. Nvidia results tonight could have an equity impact, but with the JPY having failed to benefit from the equity decline this week, we wouldn’t expect any significant JPY turn even if the results trigger more equity weakness.