It is the BoJ, not the MOF, that holds the key to sustainable JPY stabilization – Commerzbank

FXStreet Insights Team FXStreet

The US Dollar strength pushes the USD/JPY above 150.00. Economists at Commerzbank analyze the pair’s outlook.

Risk of intervention?

If a real Yen recovery is desired, there would have to be a real change of direction in monetary policy. And I don't mean a symbolic end to the symbolic negative-rate policy! But why should that happen as long as the BoJ is firmly convinced that inflation will fall back below the 2% target?

If the FX market really falls for a symbolic rate hike and interprets it as JPY positive or the start of a rate cycle, then that would be a better tool for strengthening the JPY than intervention. In short, it is the Bank of Japan, not the MOF, that holds the key to sustainable JPY stabilization.

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FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

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