I plan to open a USDJPY trade and I just stumbled upon this article. I wonder how low will the value of yen continue to fall.
The weaker the JPY, the closer we get to seeing the BoJ driven to take some decisive action. As this has not happened yet, despite the currency’s long decline, there will probably need to be a political or social catalyst to force the Bank to act, perhaps under the pretext of avoiding market panic or social break-down.
If it happens, it will be dramatic.
nice reply . thanks ,
Japan will bounce back, they always have I think the world should be more worried about Europe’s economy because it is going down and I’m afraid it won’t be able to revive.
I think you’re right. Eventually falling birth rates, natural wastage of public sector employees and rising state pension ages will re-balance the EU’s economy: but I’m talking about a 50 year-long process.
Meantime the ECB has proven how hard it is to take custody of a currency that is meant to be equivalently strong in Germany, Greece and Portugal. It would be like the Fed regulating the USD based on the requirements of the economies of the US, Chile and Belize.
Although to be honest, I’m a little bit this development is not entirely clear. What is the main reason for the reduction?
USD/JPY has been one of my favourite pairs for a long time. But I am not too worried about Japan as they have always come out stronger than ever whenever they face such challenges. Japan is really something else.
Hopefully, Japan bounces back soon. I haven’t really read much about the situation in Europe recently, but this is kinda making me worried for our European friends here.
Despite the recent removal of Covid limits, the world’s third largest economy has struggled to keep up with red-hot global inflation, sweeping interest rate increases around the world, and the Ukraine war. I hopefully pray that the economy bounce back soon.
I think Japan needs a period of high inflation to jump start inflation expectations what will help to get out of the vicious circle that cause endles QE by the BoJ. Potential beneficial implications of this inflation shock for the Japanese economy could be underestimated.