Don’t bet against the house
Last month, US support for the Japanese yen was described as “a signal of friendship.
US Treasury Secretary Scott Bessent has sent a clear warning to currency traders this week, telling them not to bet against the US dollar and Japanese yen. The yen has appreciated by more than six percent against the US dollar in just a month, settling at 153.53 last Friday after reaching above 160 at the start of September. Bessent, a former hedge fund manager and experienced currency trader, stated that he now "has pretty good insight" into the decisions of the Japanese central bank and policymakers.
The intervention by the US and Japan to buy yen has provided fundamental support to the downward movement, with expectations of a Bank of Japan rate hike, repatriation by Japanese investors, and unwinding of yen-funded carry trades further strengthening the yen. Bessent's warning is significant, as he is effectively challenging speculators to bet against the house, which in this case is the US and Japan.
The technical analysis also supports the strength of the yen, with USD/JPY breaking below key psychological and moving average levels. This shift is not limited to Japan, as the Korean won has also undergone a significant recovery, appreciating by about 16 percent against the US dollar. The broader move in Asian currencies includes the Taiwan dollar, Indonesian rupiah, Singapore dollar, Thai baht, and Chinese yuan, all appreciating by 0.5 to 2.5 percent against the US dollar.
While the Philippine peso has not yet joined the rally, a sustained move below 62 could signal that catch-up strength is beginning to materialize. Bessent's message is clear, challenging speculators to bet against the house, as the US and Japan remain closely aligned on the yen's strength.
Written by urgent.news from Philippine Star Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
