Today, Japanese Minister of Finance Suzuki Shunichi said in a speech: "Japan is facing a difficult confrontation with speculators and cannot tolerate excessive exchange rate fluctuations." As early as September 22, the Bank of Japan publicly announced that it had implemented exchange rate intervention measures by "buy yen and sell US dollars". This is the first foreign exchange intervention in the Bank of Japan since 1998. Due to the Bank of Japan's consistently clear attitude, the market often attributes the brief decline in USDJPY to the direct intervention of the central bank . For example, last Friday, USDJPY fell 1.68%, and market participants believe that the Bank of Japan has implemented another intervention measure, and the total amount of foreign exchange used is estimated to be around US$30 billion (the Bank of Japan did not directly recognize this intervention). However, in the face of trend markets, any reverse operation of a single force is difficult to be effective in the long run. As of 15:30 today, USDJPY rose 1.04%, with the latest value of 149.32, and rebounded to , which resulted in most of the declines last Friday. Judging from the rise of USDJPY, 150 is unlikely to become a strong resistance, and the next target can move to the 155 mark.
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The core reason for the continued depreciation of the yen is Feder rate hike and the Bank of Japan’s inappropriate loose monetary policy . There will be two more Fed interest rate decisions in November and December this year. Before the trend of high inflation in the United States has turned significantly, it is highly likely that the resolution will raise interest rates by 21.5%. Japan is a low-interest rate country. Even when the inflation rate of in Western countries has reached 8 to 10%, Japan's CPI growth rate is only 3%. The moderate inflation line is 2%, and Japan's inflation rate is already above that standard, but it is not significantly convenient. For Japan, which is often caught in deflation, an inflation rate of 3% is very rare. If inflation can rise further in the future, the Bank of Japan will be very satisfied. The existence of " Abenomics " has led to people not expecting the Bank of Japan to adopt a tightening monetary policy. Based on this, the supply of the yen will not decrease, and the monetary policy divergence between Japan and the United States will continue to drive USDJPY up.
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Japanese Macroeconomic The biggest highlight is the extremely low unemployment rate. The full employment level is 5%, and Japan's unemployment rate in August was 2.5%, better than most developed Western countries. Although the probability of tightening monetary policy is extremely low, from the perspective of CPI and unemployment rate, the Japanese economy can fully withstand moderate interest rate hike policies. At least, adjusting the benchmark interest rate from a negative value state to a 0% state will not cause a serious recession. However, the Bank of Japan under the guidance of "Abenomics" is much more difficult to make the above actions than the central banks of other countries.
Analysts team comprehensive view: The Federal Reserve's interest rate hike coupled with the Bank of Japan's loose monetary policy has led to an abnormal rise in USDJPY.
ATFX risk warning and disclaimer: The market is risky, and investment should be cautious. The above content only represents the view of the analyst and does not constitute any operational suggestions.
This article comes from the financial world
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