Bank of Japan left the key rate QE programme unchanged. This inaction increased the pressure on Yen.

USDJPY reached 156.80 and EURJPY nears 2007–2008 levels.

USDJPY has already surpassed the levels where the October 2022 intervention took place and where the market reversal occurred about a year later. This begs the question of ‘when’, although the question of ‘will they’ is still relevant.

Central banks and governments do not focus on the nominal levels of individual currency pairs. They care about dynamics, as abrupt changes can cause inflation and economic shock. Therefore, it is more useful to look at the dynamics to a basket of currencies.

The nominal effective exchange rate of the yen has retreated to its lowest levels since the 1990s. The yen reversal to growth in 1997 on the back of crises in developing countries was at about the same level. The pressures of the global financial crisis in 2007 turned the yen up 5% higher. Thus, the current levels are not an anomaly.

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Bank of Japan left the key rate QE programme unchanged. This inaction increased the pressure on Yen.

USDJPY reached 156.80 and EURJPY nears 2007–2008 levels.

USDJPY has already surpassed the levels where the October 2022 intervention took place and where the market reversal occurred about a year later. This begs the question of ‘when’, although the question of ‘will they’ is still relevant.

Central banks and governments do not focus on the nominal levels of individual currency pairs. They care about dynamics, as abrupt changes can cause inflation and economic shock. Therefore, it is more useful to look at the dynamics to a basket of currencies.

The nominal effective exchange rate of the yen has retreated to its lowest levels since the 1990s. The yen reversal to growth in 1997 on the back of crises in developing countries was at about the same level. The pressures of the global financial crisis in 2007 turned the yen up 5% higher. Thus, the current levels are not an anomaly.

hottg.com/fxpro/9514

462 viewsApr 26 at 12:25