Japan’s Top Currency Official Sees Some Yen Moves Deviating From Fundamentals

Recent yen moves are deviating from what might be expected given the difference between interest rates in Japan and the US, according to Japan’s top currency official.

“Basically we always say you should look at interest rate differentials between yen and US dollars or US treasury bonds and JGBs,” and the currency pair should move in line with the gap, Vice Finance Minister for International Affairs Atsushi Mimura said Wednesday. “If you look at the actual movement of foreign exchange and the movements of differentials between US and Japan interest rates on public bonds, you do see some sort of deviation recently, I would say.”