Bank of America said that Japanese authorities may have to continue to intervene in the foreign exchange market to curb the rise in the dollar against the yen.
In the absence of disappointing news about the U.S. economy, if you want USD/JPY to remain below 155 and buy time before the Bank of Japan raises interest rates, the Ministry of Finance may have to continue to intervene in foreign exchange. Shusuke Yamada and Izumi Devalier, etc. strategists wrote in a note.
Analysts expect the Bank of Japan to raise interest rates starting in the third quarter of 2024.
Yen weakness may not be enough to change Bank of Japan policy, they wrote, adding that upward pressure on the dollar against the yen may continue into the third quarter.
Hawkish surprises. For example, the Bank of Japan admits that its policy is too loose, raises interest rates in June or the end-point interest rate is higher than market expectations. It may be a necessary condition to properly boost the yen.
Bank of America: Continued intervention is needed to keep USD/JPY below 155
Bank of America said the Japanese authorities may have to continuously intervene in the foreign exchange market to curb the rise in the dollar against the yen.
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