Japanese Yen: Intervention risk supports against US Dollar – Commerzbank
Michael Pfister highlights that comments from the US Treasury Secretary about having “asymmetric information” on Bank of Japan (BoJ) moves are intended to deter speculative positioning for further Japanese Yen (JPY) weakness.
Commerzbank's Michael Pfister warns that recent comments from the US Treasury Secretary, who claims to have "asymmetric information" about the Bank of Japan's actions, may deter speculative positioning against the Japanese Yen. Pfister argues that while an interest rate hike is expected next week and further tightening is anticipated, the high expectations surrounding the BoJ limit upside for the Yen until tangible BoJ actions materialize.
The US Treasury Secretary's statements, unusual even in the context of recent developments such as joint foreign exchange market interventions, serve to prevent further yen weakness by creating caution among market participants regarding potential losses from continued intervention. However, sustained Yen appreciation is unlikely unless fundamental factors support it.
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