Hayashi's speech stimulates the yen to rise. Traders doubt how the momentum can be maintained.

The Japanese yen suddenly rose on Friday, and the biggest concern for traders is whether the government will fulfill its call to bring back the country's massive pension funds for domestic investment. Without this development, the yen seems poised to drop to its lowest level in forty years, as the global interest rate environment becomes increasingly favorable for the US dollar. Although the risk of official intervention still exists, many market participants are skeptical of the effectiveness of government intervention, given that the government earlier this year record purchases of yen. The yen rose 0.7% against the US dollar, reaching 161.29, temporarily reversing its weak trend. Earlier, Japanese Finance Minister Takeshi Kawamura called for more investment by pension funds in domestic financial assets. "This story could completely change the narrative," said Bart Wakabayashi, manager of the Tokyo branch of Daiwa Bank, "but this is just a reactive response. The sustainability of further purchases of yen will require stronger commitments as support."