USD/JPY: There are fundamental reasons for an upward trend – Commerzbank
|USD/JPY hit the 150 mark, triggering a knee-jerk reaction drop. Economists at Commerzbank analyze the pair’s outlook.
Interventions do little to change the fundamental situation
Japanese officials unanimously refused to confirm any FX intervention. Instead, they continued to emphasize their readiness to react to ‘excessive movements’.
In any case, Tuesday's exchange rate movement will reinforce the impression among market participants that the 150 in USD/JPY is a sound barrier that is difficult to break through.
Ultimately, however, interventions do little to change the fundamental situation. As long as the US economy continues to appear robust and the BoJ does not seek an exit from its ultra-expansive monetary policy, there are fundamental reasons for an upward trending USD/JPY. FX interventions will do little to change this. If the MOF nevertheless continues to intervene, an attrition battle could loom, with the currency market repeatedly testing the 150 mark and the MOF reacting accordingly. The next few days are likely to remain exciting.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.