Japanese Finance Minister Yoshihiko Noda told reporters he would respond appropriately as needed, an expression he has not previously used in his campaign to talk the currency down.
Noda was to meet Prime Minister Naoto Kan and other ministers later. Market investors, however, were skeptical whether intervention alone would do much to encourage a rise that took the JPY to a 15-year peak versus the dollar and a nine-year high against the EUR on Tuesday, battering share prices in turn.
“The dollar went to 83 yen, so the chance of intervention has increased, but it would take more than intervention,” said Kiichi Murashima, an economist at Citigroup Global Markets in Tokyo. “It has to be coupled with easing by the BOJ to have any impact.”
The radical yen rise and declines in the Nikkei average have made it more likely that the Bank of Japan will further ease its monetary policy before its scheduled rate review on September 6-7, sources told Reuters.