Huitong network
Huitong Financial App-the dollar regained its upward trend on Wednesday (May 8), rising slightly after falling earlier as the Federal Reserve cut interest rates this year, while the yen weakened again, the dollar against the yen rose again above the 155 mark, and the risk of Japanese intervention remains high. Kazuo Ueda, governor of the Bank of Japan, said monetary policy really does not seek to control the exchange rate. He warned that due to the impact of foreign exchange, policy responses may be needed and recent currency fluctuations will be closely monitored. Japanese Finance Minister Suzuki Shunichi said he would keep a close eye on exchange rate fluctuations with a sense of urgency.
(daily chart of USD / JPY, sourceClassicrouletteYi Huitong)
The dollar hit as high as 155 against the yen on Wednesday.Classicroulette.18, a four-day high, rose by about 0.32%, far from the nearly four-week low of 151.86 set last week when the Japanese authorities were suspected of intervening to devalue the yen.
Analysts said that given the still wide spread between the US and Japan, any Japanese intervention would only provide temporary respite for the yen.
Kazuo Ueda, governor of the Bank of Japan, said on Wednesday that if the trend of the yen had a significant impact on inflation, the central bank could take monetary policy action and further warn of the impact of the recent sharp depreciation of the yen on the economy. Suzuki Shunichi, Japan's finance minister, again warned that the Japanese authorities were ready to deal with excessive volatility in the foreign exchange market.
Kazuo Ueda said: "the purpose of monetary policy is to affect inflation, not the exchange rate of the yen, and will study the impact of the trend of the yen on the economy." Foreign exchange fluctuations may have a significant impact on the economy and prices, so the impact of foreign exchange fluctuations may be greater than in the past. "
He added: "the Bank of Japan does not seek to directly control the exchange rate through monetary policy. The trend of foreign exchange is one of the many factors affecting the economy and prices. The weak yen has pushed up the cost of imports, affecting the economy in other ways, such as demand. Adjust the loose policy according to the rising trend of prices. "
Kazuo Ueda said, "if the trend of the yen affects trend inflation, the BoJ may need to respond through monetary policy." We expect trend inflation to gradually move towards 2%. If trend inflation is as close to 2 per cent as we forecast, or if we see inflation exceeding the risk we forecast, we will adjust monetary policy as appropriate. "
Suzuki Shunichi mentioned that he would take all necessary measures to prevent the weakening of the yen. "observe the trend of foreign exchange with a sense of urgency and will not comment on the level of foreign exchange. Rapid fluctuations in foreign exchange are not advisable. It is important that currencies fluctuate in a stable manner that reflects fundamentals. There will be a thorough response to foreign exchange. "
"if we see a sudden sharp rise in the dollar / yen, then I expect them to enter the market to support the yen," said Carol Kong, foreign exchange strategist at CBA. But if we continue to see a gradual increase, I doubt whether they will intervene, but there are obvious risks. "
The dollar index continued its rally, hitting a three-day high of 105.53 at one point, a long way from the one-month low set last week. Investors continue to keep an eye on the pace and timing of the Fed's rate cut, which could boost the exchange rate, with the latest US non-farm payrolls data weaker than expected and the Fed's easing bias cementing expectations of a possible rate cut before the end of the year.
Minneapolis Fed Chairman Kashkari said on Tuesday that it was too early to declare that progress in fighting inflation must have stalled. This has had little effect on market expectations of interest rate cuts.
Rodrigo Catril, senior foreign exchange strategist at the Australian National Bank, said: "the market ignored the remarks made by Minneapolis Fed Chairman Kashkari, who is a hawk and is not a voting committee this year."
In the short-term outlook, recent trends in the dollar / yen depend on data on wage growth and household spending in Japan, as well as comments from the Federal Reserve. The lower-than-expected figures released by Japan could lead to the BoJ standing still, tilting monetary policy differences towards the dollar. However, the comments of FOMC members will affect buyers' interest in the dollar / yen.
FXEmpire analyst Bob Mason pointed out that the dollar / yen remained above the 50-day and 200-day moving averages, confirming the bullish price signal. If the USD / JPY can stand firm at 155, it could push the bulls above 158.
At 10:05 Beijing time, the dollar against the yen is now trading at 155.15 yen 16.