Experts agree: US-Japan intervention to boost Yen won't last long
The British Pound (GBP) claws back its early losses against the Japanese Yen (JPY) and edges higher to near 212.25 during the European trading session on Wednesday.
Financial experts agree that the US-Japan intervention to bolster the Yen will not be lasting. The British Pound (GBP) has regained some of its early losses against the Japanese Yen (JPY) during the European trading session on Wednesday, reaching near 212.25. Strategists at BNY Mellon suggest that while recent "coordinated intervention" has bought time, it hasn't significantly increased foreign JPY holdings.
They note that investors remain net long JPY, but their exposure is far below H1 2026 levels and won't recover without credible domestic follow-through, such as Bank of Japan (BOJ) tightening, fiscal consolidation, and structural reform. Societe Generale analysts believe that a sustained Yen recovery will depend on macro backdrop rather than policy actions.
They caution that more aggressive Bank of Japan (BOJ) rate hikes alone won't solve the problem unless accompanied by credible growth forecasts. TD Securities views the latest Yen intervention as a temporary measure to buy time for fiscal policy to induce global demand for Yen-based assets. They expect USDJPY to resume its uptrend unless the BOJ makes a series of rate hikes to 2% in a swift manner, with the current 1y1y OIS for Japan at 1.9% compared to the US at 4.1%, representing a 2.2% differential.
The British Pound (GBP) has underperformed against major currencies this week, becoming the weakest in the list.
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