Japan’s verbal interventions are ineffective. Periods of quiet volatility may continue to push the USD/JPY on the rise, with a new line in the sand for intervention now near 165, he notes Francesco Pesole, FX analyst at ING.
BoJ’s verbal interventions have no effect
“Looking at the recent fall in the Yen, it is clear that verbal interventions from Japan are ineffective. Despite some softer US data, speculative selling pressure on the Yen remains high.”
“Periods of quiet volatility may continue to push USD/JPY higher, with a new line in the sand for intervention now near 165, in our view. It is crucial to note that the large FX sell-off in Q2 proved to be only a temporary fix, meaning more pressure on the BoJ for a hike.”
“Markets are pricing in 6bps for the Bank of Japan meeting on July 31. We are more hawkish, narrowly favoring a 15bp hike in July and another move by year-end. The BoJ may support the Yen, although our bearish USD/JPY profile is primarily based on Fed cuts.”
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.
