Japan Intervened to Support Yen for First Time Since 1998 After BOJ Decision

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  • #44284
    TradersCom
    Keymaster

    Japan’s ministry of finance stepped into the foreign exchange market Thursday, officially for the first time since 1998 to support the yen. The US Tre
    [See the full post at: Japan Intervened to Support Yen for First Time Since 1998 After BOJ Decision]

    #44315
    TradersCom
    Keymaster

    While USDJPY saw intervention the U.S. Dollar Index climbed 0.6% to 111.28, hitting a fresh high for the year in the process.

    Safe haven and liquidity buying as forwards favored the greenback.

    #44317
    TradersCom
    Keymaster

    National Australia Bank analysts on the yen intervention Thursday.

    BoJ intervention – that would have been a MoF not BoJ initiative – which drove the pair down to a low of Y140.36.

    Given the now even starker contrast between the BoJ’s policy stance and central banks everywhere else in the world and the fact intervention is working completely against the grain of Japan’s domestic monetary policy stance, MoF will need to be in this intervention game for the long haul and in size if it is to have much hope of arresting JPY weakness in an ongoing strong USD environment.

    And short of resurrecting some sort of SNB style currency peg as the latter did with EUR/CHF (and which ultimately failed, even though the SNB was selling not buying its own currency) the law of diminishing returns will surely set in on BoJ intervention before too long.

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