The yen falls to the 157 yen level against the dollar, accelerating its depreciation after the release of US economic indicators – Bloomberg

In the foreign exchange market on the 26th, the yen fell against the dollar to the 157 yen level for the first time in about 34 years. The yen depreciated as the Bank of Japan decided to maintain the status quo of monetary policy. There was nothing new at Governor Kazuo Ueda’s regular press conference, and yen selling has further intensified following the release of US economic indicators. Markets are increasingly wary of the government and Bank of Japan’s intervention to buy the yen.

In the morning New York time, the yen briefly fell to the 157.40 yen level against the dollar. After the yen depreciated during Governor Ueda’s press conference, it was rapidly bought back and at one point hit 154 yen, but this was a temporary rebound.

“The Bank of Japan has once again shown that it is capable of a dovish surprise that surprises even the most dovish expectations on the street,” said Charu Chanana, head of currency strategy at Saxo Capital Markets. “We’re back to waiting for an intervention to stop the yen’s depreciation. But without a concerted effort and the support of a hawkish policy message, any intervention will be ineffective.”

US financial authorities place importance on The US personal consumption expenditure (PCE) core price index rose at a steady pace in March. This will likely heighten concerns about continued price pressure and postpone any rate cuts.

Also, in April, which was announced after this, The University of Michigan Consumer Confidence Index (confirmed) was 77.2, down from 79.4 last month. The preliminary figure is 77.9. The median forecast of economists compiled by Bloomberg was 77.9. Inflation expectations for the year ahead rose to 3.2%, the highest level since November last year.

The yen’s move to new lows after the Bank of Japan’s policy announcement is “justified,” and foreign exchange intervention has “no chance of success,” said George Saravelos, head of foreign exchange research at Deutsche Bank, in a report. Pointed out.

Saraveros expressed the view that Finance Minister Shunichi Suzuki’s verbal intervention had been toned down, and Governor Ueda did not make much of the significance of the yen’s depreciation at the press conference after the policy announcement, saying, “Japan has adopted a policy of being on the sidelines of the yen. The market has finally realized that they are continuing to do so.”

Saraveros said intervention cannot be ruled out if market movements become disorderly, but for the yen to continue rising, “the Bank of Japan needs to enter into a cycle of rate hikes similar to what other central banks have implemented after the coronavirus pandemic.” said.

“This is incredible weakness,” said Justin Onuekwusi, chief investment officer at St. James’s Place Management. “Certainly, this level of yen depreciation would raise concerns. We think the yen depreciation has gone too far.”

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Original title: Yen Drops Beyond 157 Per Dollar as BOJ Keeps Key Rate Unchanged

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