The USD/JPY pair reached the 150.00 level, triggering a hasty downward reaction. Commerzbank economists analyze the pair’s prospects.
Interventions hardly change the fundamental situation
Japanese officials unanimously refused to confirm any intervention in the currency market. Instead, they continued to insist on their willingness to react to “excessive movements.”
In any case, Tuesday’s exchange rate movement will reinforce the impression among market participants that the 150.00 level in USD/JPY is a solid barrier that is difficult to breach.
Ultimately, however, the interventions do little to change the fundamental situation. As long as the US economy continues to appear robust and the Bank of Japan does not seek an exit from its ultra-easy monetary policy, there are fundamental reasons for an upward trend in USD/JPY. Interventions in the foreign exchange market will do little to change this situation. If, despite everything, the Japanese Ministry of Finance continues to intervene, a battle of attrition could loom, with the currency market repeatedly testing the 150.00 level and the Ministry reacting accordingly. The next few days will continue to be exciting.
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.
