HALISTER1: BOJ May Check Rates If Yen Reaches 105 Against Dollar: BK Asset

BOJ May Check Rates If Yen Reaches 105 Against Dollar: BK Asset

(Bloomberg) -- BOJ could check rates at that level rather than wait for 1,000 pip drop from March 29 high of 113.80, BK Asset Management managing director Kathy Lien writes in note received today.
  • Alarms should be ringing at MOF and BOJ because yen’s 5% appreciation spells trouble for Japanese businesses and economy, Lien says
  • Signs suggest Japanese government isn’t ready to intervene in foreign-exchange market to lower value of yen
  • Several reasons why Japan won’t intervene yet:
    • G-7 meeting approaching; Japan is hosting in May
    • Waiting for fresh fiscal stimulus
    • Could be waiting for markets to capitulate first
  • BOJ may also consider monetary stimulus rather than direct intervention to avoid being singled out for competitive currency devaluation at G-7 meeting next month
  • USD/JPY rises 0.4% to 108.65
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Kathy Lien (Bk Asset Management)

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