The NZD/JPY currency pair hovered above a fresh 8-week low of 91.60 on Tuesday, as the Japanese Yen held firm, supported by persistent concerns that Japanese authorities may step into the foreign exchange market.
On Monday, Finance Minister Satsuki Katayama said that officials were prepared to respond appropriately to currency fluctuations at any time. Those remarks were reinforced on Tuesday when Chief Cabinet Secretary Minoru Kihara reiterated that the government would take decisive action against volatile foreign exchange moves if necessary.
Recent inflation data added another layer of support to the Yen. Fresh figures from the Bank of Japan on Tuesday indicated that underlying price pressures remained elevated. The BoJ’s new core consumer inflation measure rose 2.7% in May, while the core-core CPI increased 2.1%. Both measures eased slightly from April readings of 2.8% and 2.2%, but stayed above the central bank’s 2% target.
Still, investors remain cautious about Japan’s economic outlook, as they continue to worry that energy supply disruptions through the Strait of Hormuz will keep the economy under pressure, despite positive developments surrounding US-Iran peace talks.
The NZD/JPY currency pair was last down 0.57% on the day to trade at 91.74.
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