Has Japan finally taken the emergency hammer and broken the ¡°strengthen-yen-here¡± glass?
Finance Minister Satsuki Katayama pulled a genuine surprise on Friday when she announced toward the end of a regularly scheduled news conference that the government would pursue policies to encourage its massive pension funds to invest more at home. Details were sparse and the yen wasn¡¯t mentioned directly.
But the fact that officials dropped this unexpectedly, in a country where everything from growth plans to the Bank of Japan¡¯s rate hikes are carefully leaked to the press in advance, suggests Katayama wanted the element of surprise. And markets responded, with the yen strengthening in the direction of 161 and bonds rising.
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