Rakuten’s Post

As per the #Reuters The yen has been on a downtrend since the Bank of Japan's decision last week to end eight years of negative interest rates and roll back its radical stimulus programme. The Japanese currency hit a 34-year low against the dollar at 151.975 this week, as markets interpreted the BOJ's (Bank of Japan) dovish guidance as suggesting that rate hikes will be slow in forthcoming. It has recouped some losses to stand at 151.35 on Friday.

Japanese Yen Slides to 34-Year Low, Hits 158 Against the Dollar - https://lnkd.in/gnE7mDsQ TOKYO, Apr 27 (News On Japan) - In a significant movement in the foreign exchange markets, the Japanese yen has once again depreciated, crossing the 158 mark against the U.S. dollar. This level marks the weakest the yen has been in approximately 34 years, signaling ongoing economic pressures and potentially major shifts in Japan's financial landscape. Despite Japan's central bank raising interest rates for the first time since 2007, the rates remain very low compared to other developed nations, particularly the U.S., where aggressive rate hikes have made the dollar more attractive to investors. Additionally, the low interest rates in Japan fail to stem the yen's fall, as higher U.S. rates offer better returns for investors Source: TBS https://lnkd.in/gVqnsFwB Source

Japanese Yen Slides to 34-Year Low, Hits 158 Against the Dollar - https://lnkd.in/gnE7mDsQ TOKYO, Apr 27 (News On Japan) - In a significant movement in the foreign exchange markets, the Japanese yen has once again depreciated, crossing the 158 mark against the U.S. dollar. This level marks the weakest the yen has been in approximately 34 years, signaling ongoing economic pressures and potentially major shifts in Japan's financial landscape. Despite Japan's central bank raising interest rates for the first time since 2007, the rates remain very low compared to other developed nations, particularly the U.S., where aggressive rate hikes have made the dollar more attractive to investors. Additionally, the low interest rates in Japan fail to stem the yen's fall, as higher U.S. rates offer better returns for investors Source: TBS https://lnkd.in/gVqnsFwB Source

The Yen just touched a 34 year low against the USD. It seems Japan are going to sacrifice the currency to support the Yen carry trade. With a debt to GDP of over 260% it is not possible for the Bank of Japan to strengthen the currency leveraging rates, as the Japanese tax receipts will not cover the debt obligations and the working population is in rapid decline. This could trigger a dump of US treasuries to support Yen in the FX markets, putting added tail winds behind the US interest rate rises already in motion. #Yen #Carrytrade #USD #Debt #Financialrisk

The Bank of Japan had just ended its Monetary Policy meeting, making a historic decision to terminate Japan's status as the world's last negative-interest rate jurisdiction. This move follows eight years of negative interest rates and represents a dramatic turn toward positive rates. Notably, this rate increase is the first of its sort in 17 years. As part of this shift, the BOJ established a new short-term rate goal in the range of 0% to 0.1%. The move momentarily boosted Japanese markets, with the Nikkei 225 index up 19.5% since the beginning of the year, and the yen up 5.9% versus the US dollar.

Yen Strengthens Past 140 as Dollar Weakens 💴🇯🇵 The Japanese yen surged past 140 to the dollar for the first time since July 2023, buoyed by expectations of upcoming US rate cuts that could weaken the greenback. This latest movement comes as the yen touched 140.12, marking a ~13% appreciation against the dollar in the past three months, making it the top-performing currency among major economies. The yen’s resurgence has also led to a significant unwinding of the dollar-yen carry trade, where investors borrow in low-interest-rate Japan to invest in higher-yielding assets elsewhere. With the dollar under pressure and further rate cuts on the horizon, this trend may accelerate, further boosting the yen's standing in global currency markets. #Yen #Forex #CurrencyMarkets #USRates #JapaneseYen #GlobalEconomy

The yen is falling, and the Japanese Ministry of Finance is (likely) intervening. In March we discussed the first rate hike of the Bank of #Japan in 17 years, raising its policy rate from -0,1% to a range of 0%-0,1%. The BOJ is likely to raise its policy rate again at upcoming meetings. But interest rate differentials between Japan and other regions have become so wide that the #yen has come under significant pressure. Japan’s unorthodox monetary policy comes at a price. Since 2021, the Japanese yen has lost more than 50% of its value against the US dollar. But the currency also fell by more than 30% against the weaker euro. In the first months of the year, the yen fell almost 10% against the USD urging the Japanese Ministry of Finance to intervene. On Monday (confirmed) and yesterday (unconfirmed), interventions in support of the Yen took place. It will be interesting to see if the yen can regain confidence now that Federal Reserve has stated that it will stay higher for a little longer, or if it will be a short-term rise, such as after the interventions in 2022. #MacroFriday Subscribe to our Econopolis #EconoWeekly via bit.ly/EconoWeekly for more updates.

“The recent weakening of the #yen cannot be said to be in line with #fundamentals, and it is clear that #speculative moves are behind the yen’s fall,” Kanda told reporters. Certainly, it MUST be speculation... I may be missing something here, but maybe - just maybe - the 10bp increase of base rates to 0% was perhaps not too #hawkish after all. To provide context: Print #inflation ticked up to 2.8% recently and #consumers' one-year #inflationexpectations surged by a quarter of a percent to 2.67% reaching the highest level since this data has been compiled (since 2014). Simultaneously, wholesale inflation has reached a 40y-high and (the most likely downward-distorted) 5y #breakevens trade at 1.4%. While #yieldcurvecontrol (#YCC) has been formally abandoned, its significance diminishes when considering that the Bank of Japan (#BoJ) continues to purchase government paper (#JGBs) to manage #yields and actively promotes bank lending. This will ADD to total system #liquidity and thus support #assetprices including #bond #yields. So #FX-intervention may not be the solution Mr. Kanda.

The Bank of Japan on Tuesday ended eight years of negative interest rates. As well as bringing interest rates up to a range of 0-0.1%, the BOJ also abandoned yield curve control, where it purchased vast amounts of Japanese government bonds to cap state borrowing costs. With inflation exceeding the BoJ's target for over a year, a shift had been expected in March or April. Still, the moves were a mark of confidence from the BoJ that Japan has finally emerged from the grip of deflation. #japan #inflation #interestrates

Yen Falls to 2024 Low as Rate Gap Undercuts BOJ’s Historic Hike https://lnkd.in/gFNxnpJk The Fed and BoJ must collaborate to guide the Dollar/Yen rate to a GENTLE LANDING. A mishap could unleash a massive unwinding of the Yen Carry Trade and its impact on foreign-assets markets and Japan's 'export-competiveness'.🫣