27.11.202312:49 Forex Analysis & Reviews: Japanese yen will not fall below current levels

According to the statement of the former high-ranking official of the Japanese currency authority, Tatsuo Yamasaki, the yen will not rise above 152. The yen will likely regain its strength next year, as the Bank of Japan may abandon its policy of negative interest rates. This is expected to happen no earlier than April, when policymakers will review the results of the annual labor negotiations held in the spring, as well as consider other indicators.

Last year, the weakness of the yen led to a surge in import prices, which, in turn, caused inflation. However, this year, the influence of the yen has somewhat weakened, and the interest rate differential with the United States, which contributed to the depreciation of the yen, began to narrow. This freed the authorities from intervention.

Authorities have identified currency market volatility as a key factor determining the need for intervention. The last government intervention in currency interventions was in October of last year when the dollar jumped to 152 yen. At that time, officials were selling dollars and buying yen.

As a financial diplomat of Japan from 2014 to 2015 in the position of Vice Minister of Finance for International Affairs, Yamasaki played an operational role in large-scale interventions in the currency market to prevent a sharp strengthening of the yen. Therefore, Yamasaki stated that government intervention cannot be ruled out.