Ex-IMF’s Jen: Yen to hit bottom at 120 before rallying - BBG
|In an interview with Bloomberg, former International Monetary Fund (IMF) economist Stephen Jen expressed its take on the BOJ monetary policy program and yen outlook in the coming six months.
Key Points:
The currency will rebound to 100 by early 2018 as the Bank of Japan’s policies of controlling yields and adding stimulus through bond purchases reach a limit
“The BOJ is closer to the limits of their unconventional monetary policy than any other central bank”
Once all its options are exhausted, the yen will return to its fair value of around 90 per dollar
“Capital flows will be so intense, if the BOJ insisted on keeping the nominal rate anchored, the impact on dollar-yen would lead to other distortions and policy reactions from other countries”
“The zero percent interest-rate target will be used and adjusted in the same way that the Fed is adjusting the fed funds rate and the European Central Bank will taper”
In the next six months, “it’s more about the Fed than Japan or the BOJ”
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