This lands directly on top of the yen story that had already been building through the week, with USD/JPY drifting back to around 159.50 after intervention drove it as low as roughly 155 last month. Furusawa's comments effectively confirm what the market had started pricing in on its own, that verbal and physical intervention only buys time and that the real lever is the BOJ's rate path. His framing that Tokyo could act again at any level, not just a specific trigger point like 160 or 162, removes the psychological comfort some traders had been taking from the idea of a defended line, and his read that September hike odds have jumped to 76% from 24% in two weeks gives the pair a much firmer near term catalyst. Combined with his projection of a move toward 1.5% to 1.75% over the next several quarters, this reframes the yen story from a single intervention event into a multi-meeting BOJ tightening cycle, which is the more durable trade for desks to be positioning around.---Furusawa is telling markets not to get comfortable, intervention can come at any yen level and the BOJ isn't done hiking either.Summary:Mitsuhiro Furusawa, formerly Japan's top currency diplomat at the Ministry of Finance and now president of Sumitomo Mitsui Banking Corp's Institute for Global Financial Affairs, told Reuters the yen is clearly too weak at current levels and hurting the economy through higher import costsHe said Japan and the US could conduct joint intervention again at any time, not tied to a specific level like 160 or 162 per dollar, if the yen returns toward levels seen before last month's coordinated actionThat intervention had driven the yen to around 155.20 from a 40-year low of 163.99, before it slid back to around 159.50Furusawa said intervention only buys time and that faster BOJ rate hikes are the more fundamental fix, expecting a September hike followed by another in December or JanuaryHe estimated the BOJ ultimately wants to raise rates to around 1.5% to 1.75%, based on a neutral rate estimate of 1.1% to 2.5%, with a further hike possible in the fiscal year beginning April 2027 if growth holds upTokyo Tanshi data now shows a 76% market implied chance of a September hike, up from 24% on July 30, with Furusawa also urging Prime Minister Sanae Takaichi's government not to obstruct BOJ tighteningJapan may conduct joint yen intervention with the United States "at any time" and should signal the chance of faster than expected interest rate hikes to arrest the currency's slide, Mitsuhiro Furusawa, Japan's former top currency diplomat, told Reuters in an interview published Thursday.Furusawa, who represented Japan on currency matters at the Ministry of Finance before later serving as deputy managing director of the International Monetary Fund and now heading Sumitomo Mitsui Banking Corp's Institute for Global Financial Affairs, said the yen remains clearly too weak at current levels and is hurting the economy by pushing up import costs. He said Tokyo and Washington could step in again if the currency returns to levels seen before their coordinated intervention last month, though he stressed there is no fixed trigger point. "It is probably not a matter of intervening specifically at, say, 160 or 162 yen per dollar. But intervention could take place again at any time, including coordinated action with the United States," he said.That coordinated intervention had driven the yen up to around 155.20 per dollar from a 40-year low of 163.99, but the currency has since slid back to around 159.50, retracing much of that move and reviving the same pressure that prompted Tokyo and Washington to act in the first place.Furusawa said intervention alone only buys time, with more fundamental steps, chiefly faster BOJ rate hikes, needed to reverse the yen's downtrend on a durable basis. He said most market participants already expect the BOJ to raise rates in September and that it should, but argued the more important task for the central bank is communicating the likelihood of a faster pace of hikes going forward, rather than the September move itself. Since exiting a decade long stimulus programme in 2024, the BOJ has raised rates at roughly twice a year, including a June move that took the policy rate to a 31-year high of 1%.Looking further out, Furusawa estimated the BOJ would ultimately like to raise rates to somewhere between 1.5% and 1.75%, based on the central bank's own estimate that Japan's neutral rate, the level that neither cools nor overheats the economy, sits between 1.1% and 2.5%. He said the next move after September would likely come in December or January, with a further hike possible in the fiscal year beginning April 2027 provided the economy does not lose momentum.Market pricing has already shifted sharply toward that view. A nudge from US Treasury Secretary Scott Bessent alongside a run of hawkish BOJ communications has effectively locked in a September hike, with Tokyo Tanshi data showing markets now assign a 76% probability to a move that month, up from just 24% on July 30.Furusawa also said it was important that Prime Minister Sanae Takaichi's administration avoid standing in the way of BOJ tightening and follow through on its own fiscal sustainability pledges. "The ideal outcome would be to use monetary and fiscal policy to move away from a situation where the yen is excessively sold, while growth strategies begin to bear fruit and strengthen the Japanese economy," he said, adding that such a combination would allow the yen to appreciate gradually over time rather than through abrupt intervention. This article was written by Eamonn Sheridan at investinglive.com.