Japan’s Ministry of Finance intervened at levels above 145.90 in USD/JPY last September. Concerns are growing that a weak yen could mobilize the ministry again. Antje Praefcke, currency analyst at commerzbankanalyzes the outlook for the JPY.
The yen is unlikely to appreciate again
Although the US economy remains robust, which has already dampened Fed rate cut expectations and is supporting the dollar, I see little chance of the yen appreciating again. On the contrary, I fear that it could relax further under these conditions, unless the ministry tries to end the slide.
Perhaps the BoJ and the government will hope that things will change once US interest rates start to fall again. We also expect the US dollar to weaken at that time. But it will be some time before that happens. The only thing the ministry would achieve with interventions until then would be to buy some time, since, in our opinion, “leaning against the wind” cannot lead to success and strengthen the Yen. It is possible that this bet on time works. But it is uncertain.
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.
