How Japan Can Use the Oil Market to Support the Yen

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the worldAmericas+1 212 318 2000EMEA+44 20 7330 7500Asia Pacific+65 6212 1000Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the worldAmericas+1 212 318 2000EMEA+44 20 7330 7500Asia Pacific+65 6212 1000Japan’s heavy reliance on imported oil means swings in crude prices feed quickly into its currency and trade balance. The government has hinted that it might step into the oil market in an indirect bid to support the weakening yen, as the war in the Middle East drives up energy costs and threatens the global economy.Trading oil futures to prop up the currency would be a novel approach for Japan and mark the latest effort to mix up its intervention approach to keep speculators guessing. National governments rarely step into energy derivatives markets directly, but Japan’s Finance Minister Satsuki Katayama has expressed concern that speculative trading in oil futures is affecting the foreign exchange market. She said the government stands ready to take “all possible measures, on all fronts.”