According to David Forrester of Macquarie Bank Ltd, the IMF is showing its interest to see the BOJ make some intervention to curb the current rise in the yen. These comments have changed the yen trend as investors are now wary of the outcome of the meeting to be held from June 14-15 discussing the Japanese economy and measures to be taken to spur growth in the country.
The Japanese currency lost 0.5 percent against the euro to trade at 99.69 yen per euro at the start of trading in London. It had earlier advanced by as much as 0.4 percent before the IMF comments. Against the greenback, the yen dropped 0.3 percent to trade at 79.64 yen.
The Ministry of Finance and the Bank of Japan have intervened several times last year as the country tried to protect its export-led economic recovery from a strong yen. However, these measures were criticized by the US treasury department saying the intervention was unnecessary as the market conditions were orderly. A strong yen had forced many export related companies to make huge losses which would have led to joblessness if the government did not intervene. According to an IMF report the exchange rate have increased due to the safe haven demand causing the yen to be overvalued.