Ulrich Leuchtmann, Director of Commodities and Currency Research at Commerzbank, expect yen volatility to persistas uncertainty about the Bank of Japan’s stance will gradually diminish at best.
Clarity is unlikely to come overnight
“Even once the new BoJ governor has taken office, clarity is unlikely to come overnight. No experienced central banker would suddenly announce a 180-degree turn in monetary policy or any other significant strategy.. The reaction from the currency and bond markets could be too disruptive. In my opinion, we should expect the uncertainty about the BoJ’s stance to gradually decrease at best.”
“I find the market view expressed in USD/JPY implied volatilities questionable. That the direction of monetary policy be clarified in the very near future (and therefore high JPY volatility is generated), but after that everything becomes clear (and therefore the volatility of the JPY to decrease again), is in my opinion an excessively optimistic assessment.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
