JP10Y BoJ intervention expectation, forecast on forex market
A sharply falling yen rate could be beneficial for the Japanese economy, exports could jump significantly. But on the other hand, inflation risks skyrocketing which could be a serious problem,
Japan's Finance Minister Shunichi Suzuki yesterday said the yen's weakening was "very rapid and one-sided". He added that currency intervention is one of the government's options if the movement continues.
The US central bank is expected to be more aggressive in raising interest rates, while the BoJ still maintains an ultra-loose policy, making the yen slump. The BoJ is now the only major central bank that has not tightened its monetary policy . Previously there was the European Central Bank (ECB) which was still natural to hold interest rates, but now it has turned aggressive.
The Haruhiko Kuroda-led central bank still maintains interest rates at -0.1%, and yield curve control (YCC), where 10-year bond yields are kept near 0%. With the YCC policy, when the yield on 10-year bonds moves away from 0%, the BoJ will make purchases. This means "injecting" liquidity into the economy. Current economic conditions do not justify a change in ultra-loose policy.
Japan's Finance Minister Shunichi Suzuki yesterday said the yen's weakening was "very rapid and one-sided". He added that currency intervention is one of the government's options if the movement continues.
The US central bank is expected to be more aggressive in raising interest rates, while the BoJ still maintains an ultra-loose policy, making the yen slump. The BoJ is now the only major central bank that has not tightened its monetary policy . Previously there was the European Central Bank (ECB) which was still natural to hold interest rates, but now it has turned aggressive.
The Haruhiko Kuroda-led central bank still maintains interest rates at -0.1%, and yield curve control (YCC), where 10-year bond yields are kept near 0%. With the YCC policy, when the yield on 10-year bonds moves away from 0%, the BoJ will make purchases. This means "injecting" liquidity into the economy. Current economic conditions do not justify a change in ultra-loose policy.
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