Yen: Will the Bank of Japan finally intervene in defense?
The alarm sounds for the Yen. It seems that this week at the G20 and next at the meeting of central bank governors the Yen and the economic policy of the Japanese Central Bank will be part of the discussions between the various leaders.
Ministry officials have warned repeatedly about the yen's weakness this week, including from Finance Minister Shunichi Suzuki on Friday. His comments follow those of Bank of Japan board member Junko Nakagawa, who on Thursday said the central bank would coordinate closely with the government in monitoring exchange rates and their impact on the economy. The Yen is close to the lows it reached last November, but so far the BoJ has refused to abandon its super soft policy. Here's the change
The circumstances may be ready to see either the BoJ or the government intervene with measures to defend the Yen. Core inflation is historically high and the yen weak. While second-quarter GDP was revised lower on Friday, Cabinet Office data shows that overall demand in the economy has started to outstrip supply, overheating the economy and prompting decisions such as rate hikes. that cool the economy a bit.
One of Bank of Japan Governor Kazuo Ueda's concerns is the recent slowdown in money supply growth, but monetary conditions in Japan may be compatible with a moderate tightening of monetary policy.
There are some signs that consumption may be starting to become self-sufficient and no longer require monetary stimulus, although growth was revised downwards this week. Credit card use, department store sales, and Internet services are on the rise. Additionally, Japanese stock and property prices are rising, a potential buffer for consumers going forward. Stock volatility levels have remained subdued since April, when Warren Buffett said he wanted to increase investment in Japan and Ueda signaled there would be no significant policy changes.
Despite everything, the money markets seem rather calm, with only a slight increase compared to the past, despite the upcoming BoJ and FED board meetings. Probably
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The article Yen: will the Bank of Japan finally intervene in defense? comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/yen-boj-difesa/ on Sun, 10 Sep 2023 06:00:58 +0000.