Yen selling pressure.
This year's Golden Week was busy with work, and I’m Kometsukko who only remembers going out for meals with family, hello.
What kind of Golden Week did you all have?
Now, during this holiday, the movement of the yen is also remarkable (;'∀')
Here are some news.
(Quoted below from Yahoo News↓)
Yen selling pressure rekindled, questioning continued intervention by Japanese authorities after remarks by U.S. Treasury Secretary
With comments from U.S. Treasury Secretary Janet Yellen that frequently criticized currency intervention, the yen is once again under downward pressure driven by the interest rate differential between Japan and the United States.
On the 4th, after a speech, Secretary Yellen told reporters, "Intervention should be rare, and dialogue is to be expected." In the market, some anticipate the yen may again fall back into the 160 per dollar range. In the Tokyo foreign exchange market, the yen briefly traded at 154.65 per dollar in the post-holiday trading on the 7th, the week's low.
Finance Minister Shunichi Suzuki commented on Yellen's remarks on the 7th, saying, "We are in close communication centering on the U.S. Treasury and will continue to coordinate with other authorities, and there is no change in that." While market functioning should be healthy and there would be no need for government intervention, he also acknowledged that if there is excessive movement or disorderly volatility caused by speculation, the government must respond appropriately.
Japan's currency authorities conducted yen-buying intervention for the first time in over 10 years in September 2022, and since then the yen rose more than 10% against the dollar toward mid-January 2023. Looking at the BoJ’s current account deposit data, authorities may have intervened twice last week, but analysts at RBC Capital Markets and Bank of America (BoA) expect the yen to return to the 160 range.
Japan possibly conducted about 3.5 trillion yen in currency intervention, hints from BoJ current account deposit outlook
Arvin Tang, Asia FX strategist at RBC Capital Markets, predicted, "If U.S. yields do not go lower from here, the yen would likely revert to the pre-spike level," and told Bloomberg TV that after stabilizing in the low 150s, it would once again test 160.
Shusuke Yamada, chief FX and interest-rate strategist at BoFA Securities, noted that if no sign of rate cuts in the U.S. by around September appears, "the yen could stay under downward pressure at least until autumn," and "there's a possibility the dollar/yen could target 160 within the year."
Ueta Marito, head of Financial Market Research at SBI Liquidity Markets, said the yen strengthened smoothly after the 2022 intervention, but this time that may not be possible. "Back then, there was a belief that U.S. rate hikes would end, unlike now when the outlook is unclear. The outlook is uncertain now," he said, and "there is a possibility again of testing 160 within the year."
If crude oil prices rise, Japan’s trade deficit could widen. Japan’s seasonally adjusted trade balance has been in deficit for almost three years. The yen has historically been bought as a safe-haven currency during various disasters and crises, but this year the rise in energy prices due to heightened tensions in the Middle East is putting upward pressure on prices, not allowing the typical movements seen before.
...that’s the gist.
In the news, there was a graph showing the yen’s movements, and even with intervention (?) it seems to revert back...
What will happen?
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