Should Japan intervene to sell USD/JPY to support its currency which has slumped due to the Bank of Japan's policy, there may be a clash with Unit
Should Japan intervene to sell USD/JPY to support its currency which has slumped due to the Bank of Japan’s policy, there may be a clash with United States.
The much weaker dollar that could result should USD/JPY drop as far as it did in 2022 could seriously impact U.S. monetary policy at a time when the Federal Reserve is contemplating easing.
In a U.S. election year, when there will surely be political pressure to give the economy some stimulus, a slump in the dollar’s value that could fuel an unwanted and unexpected rise in inflation might put pressure on the U.S. central bank to raise interest rates.
In 2022 the trade-weighted dollar swiftly lost around 6 percent of its value, while the dollar index (predominantly euro) collapsed in much more spectacular fashion from 114.78 to 100.80. The dollar has never fully recovered from the shock of BOJ’s intervention with the DXY still only at 104.63.
BOJ’s actions have had far more impact on dollar than the yen which has slumped to record lows this year and under the guidance of the BOJ the yen will surely drop further.
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Thomson ReutersTrade weighted dollar and trade weighted yen
COMMENT-US and Japan might clash over FX intervention — TradingView News
Should Japan intervene to sell USD/JPY to support its currency which has slumped due to the Bank of Japan's policy, there may be a clash with Unit
Should Japan intervene to sell USD/JPY to support its currency which has slumped due to the Bank of Japan’s policy, there may be a clash with United States.
The much weaker dollar that could result should USD/JPY drop as far as it did in 2022 could seriously impact U.S. monetary policy at a time when the Federal Reserve is contemplating easing.
In a U.S. election year, when there will surely be political pressure to give the economy some stimulus, a slump in the dollar’s value that could fuel an unwanted and unexpected rise in inflation might put pressure on the U.S. central bank to raise interest rates.
In 2022 the trade-weighted dollar swiftly lost around 6 percent of its value, while the dollar index (predominantly euro) collapsed in much more spectacular fashion from 114.78 to 100.80. The dollar has never fully recovered from the shock of BOJ’s intervention with the DXY still only at 104.63.
BOJ’s actions have had far more impact on dollar than the yen which has slumped to record lows this year and under the guidance of the BOJ the yen will surely drop further.
For more click on
www.tradingview.com
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