On Wednesday, the US dollar rose by 146 against the yen, continuing to hit a new high since 1998, surpassing Japan's first intervention in the foreign exchange market since 1998. Meanwhile, the market began to speculate whether the similar decline of the yen was enough to allow the Japanese authorities to support the yen again.
Hirokazu Matsuno, a senior spokesman for the Japanese government and Chief Cabinet Secretary, was asked at a regular press conference on Wednesday about the depreciation of the yen. He said:
"We will continue to pay attention to the trend of the foreign exchange market with a high sense of urgency and take appropriate measures to deal with excessive fluctuations."
It is reported that traders will now regard the high point of 147.66 hit by the yen in 1998 as the next key goal, but strategists say the authorities will not necessarily intervene again, and they may pay more attention to the rate of decline. The Japanese Ministry of Finance spent 2.84 trillion yen ($19.6 billion) in September to limit the depreciation of the yen. Yoshio Iguchi, managing director of Traders Securities, securities institution Traders Securities, said:
"The US dollar may briefly break through 146 against the yen today, but the market situation is so tense that it will be short for the time to stay at that level. The 'Chicken Racing' game will continue, and people want to test the upside, but at the same time they are afraid of being hit by the intervention of the central bank ."
The BOJ's loose monetary policy continues to put pressure on the yen. On Tuesday, according to the Financial Times, Japanese Prime Minister Kishida Fumio supported the Bank of Japan's ultra-loose policy despite the yen plummeted. Fumio Kishida said the central bank needs to maintain its policies until wages rise, and he urged companies that do raise prices to increase their wages as well. However, companies warn of the negative impact of easing policies on the domestic economy, claiming that rising inflation will put families in a cost-of-living crisis.
Meanwhile, the sell-off of U.S. Treasury bonds helped push up the dollar, increasing downward pressure on the yen. Ray Attrill, head of National Bank of Australia, said:
"Given that the 10-year Treasury yield once rebounded to more than 4%, the US dollar was boosted by risk aversion sentiment, and Japanese Prime Minister Kishida said yesterday that it fully supported Kuroda Haruhiko and the Bank of Japan's policies, it is reasonable for the US dollar to rise against the Japanese yen to rise against the Japanese yen. However, if the rise is too fast, we may see another wave of intervention."
Despite this, the weekly historical volatility of the US dollar to the Japanese yen has dropped to its lowest level since March, indicating that the recent trend is far from extreme.
RBC head of Asian Forex Strategy in Singapore, Alvin Tan said it is unlikely that the Bank of Japan will surrender to the market so easily, but the defense line may move upward due to further US dollar gains. The U.S. inflation report on Thursday is expected to be the next key catalyst. Koji Fukaya, a Tokyo researcher at
Market Risk Advisory, said:
"Traders may regard today as a good time to test the downward space of the yen before the release of the US CPI data. And if the US dollar rises against the yen after the release of the CPI data and there is no sign of intervention, they can continue to sell the yen."
Statement: The copyright of this article belongs to Jinshi Data. Any commercial organization, website, company or individual is prohibited from reprinting or reuse of the information in the article without written authorization. Violators will be prosecuted.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-