Takatoshi Ito is currently a scholar at Columbia University.
- From 1999 to 2001, he served as Deputy Director-General for International Affairs at the Japanese Ministry of Finance.
- For two years until 2008, he served as a civilian member of the government’s Supreme Economic Council.
He told Reuters:
- “By interfering with speculative activity, the authorities are trying to create market expectations that 160 yen could be the upper bound for the dollar/yen pair.”
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“If the yen is gradually depreciating as a result of interest rate differentials, it will be difficult to change the trend through foreign exchange intervention,” Ito said. “If the yen continues to weaken and there is a pass-through to inflation, two rate hikes by the end of the year could be an option for the Bank of Japan.”
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“The Bank of Japan could raise interest rates as early as this fall, raising the short-term policy rate to 0.5% by the end of the year.”
Perhaps this man is in the best position to name a potential “line in the sand.” It was there that the Bank of Japan first intervened on Monday, so he may be onto something.
update:
