Online Forex – UBS said on Thursday (August 26), if the intervention action of the Japanese government to stop the surge of JPY in the forex market was not effective, or the forex brokers choose to increase the speculation buying of JPY to further spur the Japanese government in the forex market, then the forex rate of USD/JPY might slumped sharply again, and it was possible that the forex price would slump to the lowest point at 79.75 which was made in the year 1995.
This bank said even though recently the forex rate of USD/JPY slumped sharply, but JPY long position did not increase sharply just like that at the time in the financial crisis to surge up to the extreme high point, and the asset managers still had enough time and space to buy in hedge currency JPY.
Several Tokyo forex dealers said the forex rate of USD/JPY would get a rebound later in the global forex market, because the risk sentiments had slumped to some content. But generally speaking the forex brokers was still panic about the prospect of the global economic growth, therefore the forex price of JPY would still got a rebound in the few days after.
According to the report of the Japanese media on Wednesday (August 25), the prime minister of Japan Naoto Kan said he had a sense of crisis on the strong performance of JPY in the forex market, and he hoped to react to the appreciation of JPY as soon as possible, and pointed out to deal with the fluctuation of JPY in the forex market would be the priority of his job.
At the same time, according to relevant sources, if the appreciation of JPY was too quick or too much, the Japanese government would take the intervention action in the forex market, but any intervention action would be targeted to smooth the huge fluctuation of the forex price of JPY. What’s more, in the previous night in the US stock market the three major stock shares stopped their four days’ slumping trend in succession, and the risk sentiments in the forex market got some improvement, the demand for hedge currencies such as JPY reduced in the forex market.
UBS still predicted the forex trading range of USD/JPY would be between 84.00 and 85.00 on Thursday.
Edited by Laura
