Yesterday, Japanese Prime Minister Kishida Fumio strongly supported the Bank of Japan to continue to adhere to the ultra-loose policy. Today, the foreign exchange market took action to push the yen to fall again against the US dollar, setting a new 24-year low and falling below the level of the September intervention.
As of press time, the yen exchange rate against the US dollar fell to 146.34, falling below the level of 145.90 when it first intervened since 1998 in September, which once again triggered speculation about whether the Bank of Japan would continue to take intervention measures to support the yen exchange rate.
Although the pace of selling the yen in the market has slowed down compared to earlier this year, and according to the Japanese Ministry of Finance, a total of 2.84 trillion yen (about 19.6 billion US dollars) was spent in September to prevent the yen from falling. However, the market is still worried that as the Federal Reserve continues to tighten, the Bank of Japan maintains loose policies and unwavering, it may put the yen exchange rate ongoing pressure.
media said that traders currently regard the high point of the 1998 yen exchange rate of 147.66 as the next key point of intervention. However, some strategists also said that the Bank of Japan may not intervene again, and the downward speed of the yen exchange rate will become the focus of attention. Yoshio Iguchi, managing director of securities agency Traders Securities, said recently:
yen exchange rate may briefly break through 146 today, but considering the tense market situation, it may last for a short period of time... The 'Chicken Race' will continue, and people want to continue to test the upward space, but at the same time they are afraid of being affected by intervention.
NTB 1 head of said:
In view of the 10-year US bond yield rebounding to more than 4%, the US dollar trend is boosted by market risk aversion sentiment. And Japanese Prime Minister Fumio Kishida fully supported the policy position of the Bank of Japan and Governor Kuroda Haruhiko yesterday, so it is reasonable for the US dollar to rise against the Japanese yen... But as we just saw a rapid rise in the US dollar to the Japanese yen, then we may see a new round of intervention actions (Bank of Japan).
But it is worth noting that the one-week historical volatility of USD versus the Japanese yen has fallen to its lowest level since March, indicating that there may not be extreme trends in the near future.
The current market focus is the US September inflation data to be released this Thursday. In this regard, Iguchi believes that
Tomorrow's CPI data may provide a catalyst for the yen trend, but before this, traders will not build positions in large quantities.
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