After the United States released an overexpected inflation report, the yen fell to a lowest level of 32 on Thursday night, and then showed a slight rebound trend. The market speculated whether the Japanese government intervened.
Later Thursday, the latest data released by the U.S. Department of Labor showed that the U.S. consumer price index (CPI) rose 8.2% year-on-year in September, higher than the expected 8.1%, and has been above 8% for the seventh consecutive month.
After the release of the US CPI index, the US dollar exchange rate against the Japanese yen (USD/JPY) once climbed to 147.67, the highest level since 1990.
The dollar-JPY exchange rate has subsequently rebounded in fluctuating trading since hitting its 32-year high. In early trading in Tokyo on Friday, the index fluctuated around 147.25.
Even though the yen rebounded, it is still lower than last month's low of 145.90. After the yen hit this low last month, the Japanese government used 2.84 trillion yen (about 19.6 billion US dollars) to conduct its first intervention in more than 20 years to support the yen.
Strategists speculate that the relevant departments may pay attention to the rate of the decline and thus decide whether to intervene.
After the release of US CPI data, Bank of Japan Governor Kuroda Haruhiko reiterated its commitment to pursuing loose monetary policy at a joint press conference on Washington .
Japanese Finance Minister Suzuki Shunichi also said that the authorities will take appropriate actions to prevent excessive fluctuations in the exchange rate . However, the Japanese Ministry of Finance declined to comment on whether Japan interferes in the market again.
intervention mainly depends on volatility
senior foreign exchange strategist at Domingo Securities said, "The indicator that needs to be paid attention to is not what level the yen is at, but its volatility."
He pointed out that compared with the previous period, the fluctuations between the US dollar and the yen were quite moderate, so the Japanese government did not take urgent measures.
Kuroda's remarks once again emphasized the Bank of Japan's position that its easing policy will not be changed in the short term, which further exacerbated the policy differences between the Bank of Japan and the Federal Reserve , and the market expects the US dollar to strengthen further.
Shinsuke Kajita, chief strategist at Japan's Resona Holdings in Tokyo, believes that the market has digested the Federal Reserve's hawkish stance under the exceeding expectations of CPI and strong US dollar.
Shinsuke said, "This will make it difficult for the US dollar to further break through the 32-year high hit yesterday, at least during the Tokyo trading period (today)."
However, Alan Ruskin, chief international strategist at Deutsche Bank , believes that the actual level of the yen is more important. The Japanese government should pay attention to the incident where the yen fell below the 24-year low a day ago and consider whether to intervene further.
Source: Cailianshe
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