Goldman Sachs strategists pointed out in their latest report that US Treasury yields climbed as Fed terminal interest rates further repriced and the dollar could rise to 150 against the yen within three months.

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html After the US dollar hit a 32-year low against the yen on October 17 and approached the key 150 mark, traders remained highly vigilant about possible intervention by the Japanese authorities.

Goldman Sachs strategists pointed out in their latest report that with further repricing of the Federal Reserve's terminal interest rate at Fed, U.S. Treasury yields climbed, and the dollar may rise to 150 against the yen within three months.

"While we believe that the Japanese Treasury will not hesitate to conduct additional interventions when necessary, this demand seems less obvious as long as the volatility of the crossover is still suppressed. If the Bank of Japan does not change its yield curve control policy (previously expected to change until the end of next March), the US dollar against the yen should continue to move higher. However, as the risk of interest rates looks to become ‘more symmetric’, the extent to which the yen will soften further seems limited," Goldman Sachs strategist, including Kamakshya Trivedi, said in a research report.

USD 5 against the Japanese yen breaks through 150 "on-touch"

Since the beginning of this year, the yen has depreciated against the US dollar by nearly 30%, and the USD yen against the Japanese yen has hovered at 149 from around 115 at the beginning of the year.

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Judging from the current monetary policy of the United States and Japan, one "tight" and the other "loose" can be said to be "going against the way". The Bank of Japan has issued six interest rate decisions this year, all of which have maintained its position on loose monetary policy . Due to concerns about out-of-control inflation, the Federal Reserve has raised interest rates by 3,300 basis points this year to tighten its monetary policy.

The latest Fed Federal Open Market Committee (FOMC) minutes show that the Fed is likely to raise interest rates by 75 basis points and 50 basis points respectively at its November and December meetings. Under the pressing of the Federal Reserve's interest rate hikes in , the US dollar breaking through 150 against the Japanese yen seems to be "about to break out".

"We have been paying attention to the trend of the forex market with a sense of urgency. If speculators or others trigger excessive action, our position will never change and we will take bold actions." Japanese Finance Minister Shun Suzuki reiterated on Monday.

9 Japan implemented foreign exchange intervention in September

html On September 22, after the Federal Reserve announced the third rate hike of 75 basis points this year, the yen entered a depreciation channel. In the afternoon of the same day, Japanese Deputy Minister of Finance Masato Kanda said that Japan has taken bold actions and has intervened in the foreign exchange market, and will closely monitor market trends with high urgency. The government is highly concerned about excessive fluctuations in the yen.

Kanda's speech once violently increased the yen by 525 points. Subsequently, Suzuki Shunichi and Kanda Shinto held a press conference, and Shunichi Suzuki emphasized that "were intervened in the foreign exchange market today."

Suzuki Shunichi spoke at the IMF annual meeting on October 14, talking about Global Economy and Japan's economy mentioned that as the United States and other countries turn to significantly tighten monetary policies, the global financial environment has tightened, and the debt situation of low- and middle-income countries has further deteriorated. Against the backdrop of the pandemic for more than two and a half years, many countries have limited fiscal space.

The volatility of the foreign exchange market has risen sharply, which is extremely worrying. Against the backdrop of speculative movements, the yen experienced unprecedented unilateral rapid fluctuations, resulting in the implementation of foreign exchange intervention last month. "In principle, the exchange rate is determined by the market. It may have a negative impact. The international community also needs to pay close attention to the impact of recent exchange rate trends on inflation, capital flows, debt issues, etc., and make appropriate responses." Shunichi Suzuki said.

It is understood that the last time Japan intervened in the foreign exchange market to buy yen in the US dollar was at the worst time in June 1998, and the last time it entered the market to sell yen was in November 2011.