USD/JPY: Intervention warnings and BoJ tweak – BBH
|Brown Brothers Harriman’s (BBH) Elias Haddad reports that Japanese officials are escalating verbal intervention as USD/JPY approaches 160.00, a potential line in the sand. While FX intervention may slow Yen weakness, the bank underlines that higher energy import costs and global yields remain strong headwinds, and a minor BOJ natural rate adjustment signals only marginally less accommodation, not an aggressive hiking cycle.
Yen pressured despite BOJ’s hawkish nuance
"Japanese Finance Minister Satsuki Katayama stepped-up intervention warnings as USD/JPY edged closer to 160.00, a potential intervention threshold."
"FX intervention may slow the yen’s slide, but it can’t offset the twin drag from higher energy import costs and higher global bond yields."
"On a side note, the Bank of Japan made a minor hawkish tweak to its natural rate of interest estimate (level of the real interest rate that is neutral to economic activity and prices)."
"The new natural rate of interest range is estimated to be between -0.9% to 0.5% (or 1.10% to 2.50% in nominal terms) vs. -1.0 to 0.5% previously (or 1.00% to 2.50% in nominal terms)."
"The small uptick to the lower bound of the range signals less accommodation at the margin, but not a more aggressive hiking cycle."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.