Japan Fires Its Top Currency Diplomat As Yen Disintegrates, Another Intervention Looms

It is hardly a coincidence that literally minutes after the USDJPY hit 161 for the first time in almost two generations…

… that Japan’s Nikkei reported the man who had been tasked to explain away Japan’s absolutely catastrophic currency policy, one which has made the yen the worst performing currency of the world and the envy of banana republics everywhere…

Dear @Bank_of_Japan_e congratulations, your toilet paper of a currency is now the worst performing in the world, with the lira, peso and real all stronger.

And the best part is once you finally contain it, you have a bond market crash to look forward to. pic.twitter.com/UKmKWuDq6c

— zerohedge (@zerohedge) June 27, 2024

… i.e., Japan’s top currency “diplomat”. Masato Kanda, has been fired.

Kanda will be replaced with Atsushi Mimura, a director-general of the Finance Ministry’s international bureau, who will take over as vice finance minister for international affairs on July 31.

Incumbent Kanda has been the main figure in handling the government’s catastrophic interventions in the foreign exchange market, which have been meant to arrest the yen’s slide against the dollar, yet despite spending a record $60+ billion two months ago on halting the yen’s implosion, the yen is now at the lowest level since the Plaza Accord.

And while no amount of intervention will prevent the yen from imploding further – to do that the BOJ will have to raise rates to 4% or higher, setting of a cataclysmic collapse of the entire Japanese bond market – the outrage among the populace at the runaway inflation in Japan in large part due to the plunging currency, is finally being addressed now that Japan is facing election in a few months, and scapegoat time has arrived.

We fully expect another intervention round in the coming days, one which sends USDJPY back to the low 150s before the pair resumes it trek higher until such time as Japan finally loses control over both its currency and bond markets. That will be the beginning of the end of the current doomed experiment in neoliberalism.