investingLive APac FX news wrap: Yen up, Japan finmin threat of joint intervention with US

The yen has become the standout performer, rallying sharply after Japan's finance minister stated that foreign-exchange intervention remains an option under the US-Japan framework, ruling out no measures, including joint action. This statement had an immediate market impact, further accelerated by a Reuters report indicating that some Bank of Japan policymakers see the possibility of earlier interest rate hikes, potentially in April, should the risks of weak-yen-driven inflation persist. There is rising internal concern that yen depreciation could trigger wider price pass-through, complicating the BOJ's assumptions regarding fading cost-push pressures. Yen crosses saw USD/JPY briefly dip below 158.00 before stabilizing. However, the earlier underperformance of the yen has been exacerbated by political dynamics, with expectations that an election victory for Prime Minister Sanae Takaichi might grant a strong mandate for expansionary fiscal policy, contributing to ongoing structural pressure on the currency despite the increased rhetoric surrounding intervention. A sustained recovery for the yen appears challenging in the current environment. Traders should remain vigilant for upcoming economic data which could further impact the currency's movement.