- The yen traded at 156.3 per dollar on Thursday, still weak against its 10-year average of about 123, after gaining earlier in the week on a rally in Japanese equities and bets on more fiscally responsible policy following Prime Minister Takaichi's election win.
- Kawasaki Heavy Industries chairman Yoshinori Kanehana said yen at 150 would make him consider moving manufacturing from the U.S. back to Japan; the company operates 27 production sites outside Japan, including in the U.S., and 17 at home.
- Inpex president and CEO Takayuki Ueda said 100 yen to the dollar is the appropriate level for the Japanese economy, even though nearly 90% of the oil company's business is outside Japan and conducted in dollars; a 6.7% yen depreciation to 158.37 per dollar offset part of its H1 revenue decline.
- Investors expect the BOJ to hike 25bp to 1.25% at its two-day meeting that concludes Friday, with Ebury head of market strategy Matthew Ryan expecting hawkish rhetoric that endorses a quarterly pace of rate increases thereafter.
- The Fed's rate hike and hawkish policy outlook pushed Asian currencies broadly lower, with the yen slipping into the 156 range and the U.S. Dollar Index rising above the 100 mark.
- Japanese businesses factored in an average exchange rate of 152.51 for H2 in the BOJ's July quarterly survey of business sentiment.
- The chairman of the industrial body representing Japan's trading companies urged a stronger yen for the good of the country, even as the sector books windfall gains from the weak currency.
Quotes
“we cannot make [a] strategy”
“if we look at the Japanese economy as a whole, the current exchange rate is perhaps too weak”
“we had some concern that the [weak yen] would create a confused situation in the financial market”