Morgan Stanley's head of Japan stated that he hopes the yen will appreciate to around 140 against the US dollar, with the key to achieving this lying in the actions of the Bank of Japan.
In an interview, Alberto Tamura noted that if the Bank of Japan fails to raise interest rates in June, it will impact both the bond and foreign exchange markets. He mentioned that the yen could potentially depreciate to 170 or appreciate to 140 against the dollar, depending on developments, though he did not provide a specific timeline.
Tamura indicated that some investors believe the Bank of Japan has been slow to act, and therefore, taking action would be a crucial first step. If global conditions stabilize, this could also serve as a pathway for the yen to strengthen.
Despite market speculation that the Japanese government has intervened multiple times since late last month to support the yen, the currency continues to face pressure. Investors are closely watching whether the Bank of Japan will raise interest rates next month, while concerns over inflation and fiscal policy have also contributed to a sharp decline in government bonds.
Tamura added that Japanese authorities do not want the yen to depreciate significantly from its current levels. As of Wednesday morning Tokyo time, the dollar was trading at 159.02 yen.
Japanese Finance Minister Shunichi Suzuki stated on Tuesday after meeting with G7 officials in Paris, "We will take decisive action if necessary." Following his remarks, the yen strengthened against the dollar; earlier, the yen had fallen to its lowest level since April 30, when Japanese authorities conducted their first currency intervention since 2024.
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