Japanese Yen: Intervention ceiling guides BoJ path – BNY
BNY’s Geoff Yu highlights strong Japanese Yen flows and a declining USD/JPY as markets hesitate to challenge Japanese and U.S. authorities. He argues that heavy post-intervention selling has largely run its course and that around 160 in USD/JPY now acts as a practical intervention ceiling.
The Japanese Yen has been a focal point in recent market movements, with the Bank of Japan (BoJ) considering intervention to stabilize its exchange rate against the US Dollar. BNY's Geoff Yu points to a practical intervention ceiling around 160 USD/JPY, as post-intervention selling has largely subsided. While the BoJ is contemplating a 25 basis point rate hike to 1.25% at its September 18 meeting, the central bank remains cautious about intervention alone driving sustained Yen appreciation.
The macro backdrop has shifted from early Abenomics to a more inflationary environment, making a stronger Yen unlikely in the near term. Nonetheless, a weakening Dollar and rising Fed rate-hike expectations bolster the Yen's appeal for investors.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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