Recovering from record lows of 75.78 on Friday, the USDJPY currency pair has rebounded to trade at 76.11 in the New York midday.  Causing traders to pare back long positions in the Japanese yen were comments made earlier in the session by Japanese Finance Minister Jun Azumi and Chief Cabinet Secretary Osamu Fujimara.

Both policymakers warned traders that stern action may be required to address the currently strong yen – as it reached post World War II highs.  Highlighting that the record exchange rate against the US dollar has been “extremely unfortunate”, Azumi noted that the Ministry of Finance and Bank of Japan were ready and willing to “take decisive action” against market speculators.  This is a stronger tone than has been issued in the recent past, lending some to take heed of the warning this time.  The comments come on the heels of a better than expected monthly exports data release by the MOF and last week’s proposal to boost domestic spending and Japan’s own foreign investment objectives.

These new measures proposed by government officials would effectively build on the reserves set aside to finance any intervention efforts – increasing the sum to approximately $600 billion.  However, Japanese officials remain reluctant to aggressively use such a measure given the global attention being brought on by Beijing’s own intervention efforts.

As a result, expectations are high that the USDJPY exchange rate will remain within the current 76.00-78.00 range for the time being.