The contradictions in Japan¡¯s efforts to protect the yen while slowing the pace of rising bond yields are becoming increasingly clear in currency and debt markets.
While Thursday presents a slightly different picture after the Federal Reserve kept rates on hold, the action in Tokyo on Wednesday underscores Japan¡¯s huge challenge.
The day began with the nation¡¯s top currency official at the Finance Ministry giving one of the starkest warnings yet that authorities were ready to intervene in the foreign exchange market to stem the yen¡¯s fall. By lunchtime the Bank of Japan was preparing to wade into the debt market to slow the speed of the 10-year bond yield¡¯s ascent toward 1%.
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