USD/JPY bounced above 146 after Deputy Governor Uchida stated that the BoJ will not raise rates when the market is unstable. That said, markets should refrain from bidding USD/JPY above 150, notes Chang Wei Liang, FX and Credit Strategist at DBS.
Political environment turns adverse towards a weak JPY
“The sharp sell-off in carry trades triggered by uncertainty over the BoJ’s policy rate path has entered an uneasy pause.”
“In fact, USD/JPY bounced back above 146 after Deputy Governor Uchida stated that the BoJ will not raise rates when the market is unstable, making it clear that financial stability is part of its policy consideration. The Nikkei index has also bounced back around 11% from its low since Monday.”
“That said, markets should refrain from bidding USD/JPY above 150. Japan’s political environment has become increasingly adverse towards a weak JPY, and the BoJ remains concerned about any inflation pass-through from the exchange rate.”
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.
