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Woah, Time to Slow That Yen Fall?

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Eight months into the yen's steep decline and Japan's policymakers are starting to voice their concern about the pace of the currency's move.

The yen pulled back from four-and-a-half year lows against the dollar on Monday following a report in the Wall Street Journal that cited Japanese economy minister Akira Amari as saying the yen's excessive strength has now been largely corrected and further weakness in the currency could be harmful.

The remarks have certainly made the currency markets sit and up and pay attention, market strategists said, adding that Tokyo was probably seeking to slow rather than stop the sharp decline in the value of the yen which has provided a boost to the country's exporters.

(Read More: Hold On, Japan Still Missing Key Pillar of Growth)

"One of the concerns is the volatility in the yen and that the pace in the move has been a bit faster than they were expecting," said Mitul Kotecha, head of global currency research at Credit Agricole in Hong Kong. "That's probably what the concern reflects, rather than a real desire to stop the weakening further."

The yen is the world's worst-performing major currency, having shed almost 19 percent against the dollar since the start of the year in the face of aggressive monetary stimulus to revive Japan's weak economy.

And since breaking the key 100 barrier versus the dollar in early May, the yen has declined more than 4 percent – a sharp move for just over two weeks of trade. It stood at 102.83 per dollar on Monday, off a four-and-a-half year low around 103.30 set on Friday.

(Read More: Dollar Hits the Yen Century Mark for the First Time in Four Years)

"With dollar/yen, it is interesting that we are trading lower this morning on the economy minister's comments," said Jesper Bargmann, Head of G11 spot currencies at Royal Bank of Scotland. "100-112 is a reasonable target for the next quarter. Although they [Japanese officials] are trying to put a dampener on it, the market is going to drive it a bit further.

(Read More: Central Banks in Driving Seat for Asia Markets)

Intervention?

According to some analysts, Japan could start intervening in the currency markets soon to slow the pace of the yen's fall.

"What is a major obstacle is the pace of the yen's decline and right now we've seen a 25 percent decline in the past 12 months versus the dollar and a 30 percent decline against the euro -- This is unprecedented for a major currency to depreciate so much in a 12-month period," said Michael Woolfolk, senior currency strategist at BNY Mellon, told CNBC on Friday.

"So I think what you're going to get is the market and speculators pushing the yen lower and the BOJ does what it does best, manage market expectations and tap on the breaks. I say we get intervention from the Bank of Japan before the end of the summer to keep the markets honest."

-— By CNBC.Com's Dhara Ranasinghe; follow her on Twitter @DharaCNBC