JPY continues to decline. Overview for 08.05.2024

The Japanese yen is weakening against the US dollar. The current USDJPY exchange rate stands at 155.17.

The yen has significantly deviated from its peak value of 151.16 against the US dollar. The strengthening of the JPY was achieved through currency interventions by the Japanese authorities. While this information has yet to be officially confirmed, there are no other explanations for these developments. It appears that interventions took place at around 160 yen per US dollar. The market will now watch this point particularly closely.

However, it is worth noting that any intervention by fiscal authorities will only give the market a short-term respite. The JPY will remain under pressure if a significant difference between the Bank of Japan and the Federal Reserve interest rates persists.

This morning, Bank of Japan governor Kazuo Ueda hinted that the central bank could take monetary policy action if a decline in the yen's depreciation significantly impacts inflation and prices.

This potential move should be seen as a possibility of the BoJ raising the interest rate from zero if the consumer price index increases. However, these are just words for now.