USD/JPY: Little chance of Yen appreciating again – Commerzbank
|The Ministry of Finance (MOF) intervened at levels above 145.90 in USD/JPY last September. Concerns are increasing that the weak Yen might mobilize the MOF. Antje Praefcke, FX Analyst at Commerzbank, analyzes JPY outlook.
Bet on time?
While the US economy remains robust, which has already dampened Fed rate-cut expectations and is supporting the Dollar, I see little chance of the Yen appreciating again. On the contrary, I fear that it might ease further under these conditions unless the MOF tries to end the decline.
Perhaps BoJ and MOF are hoping that things will change once interest rates in the US begin to fall again. We, too, expect the Dollar to weaken at that point. But it will be some time before that happens. The only thing the MOF would achieve with interventions until then would be to gain some time, as in our view ‘leaning against the wind’ cannot lead to success and strengthen the Yen. It is possible that this bet on time will work. But it is uncertain.
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.