The Yen Gains Confidence as it Returns to Highs
The USD/JPY pair is regaining its footing and marching confidently toward its previous highs.
The Japanese Yen, when paired with the US Dollar, appears poised for another round of depreciation, with the current USD/JPY exchange rate standing at 146.05.
Notably, the Japanese Ministry of Finance has recently taken an intriguing approach to address the weakening yen. They’ve shifted from employing financial measures to issuing verbal warnings and, more recently, sending cautionary letters. This transition in tactics seems to have lessened the ministry’s impact on the market.
Market sentiment suggests that the Bank of Japan (BoJ) might consider more concrete interventions if the dollar surpasses the 150-yen mark. Until then, they appear content with verbal communication.
The Yen’s ongoing weakness is deeply rooted in the substantial interest rate differential between the BoJ’s stance and that of major central banks. While the BoJ maintains a negative interest rate, the Federal Reserve remains committed to further hikes.
In this context, it seems inevitable that the yen will continue its decline.
The post JPY Prepares for Another Declining Wave – Overview for August 22, 2023 appeared first at R Blog – RoboForex.
