Brendan McKenna of Wells Fargo Securities said the Japanese yen may continue to slide once morest the US dollar, if differences between the Bank of Japan and the Federal Reserve’s policies persist.
The price of the Japanese yen fell on Wednesday to a new record low once morest the dollar, and at its lowest level in 20 years, 129.43 yen, following the Bank of Japan intervened once more, defending very low interest rates in Japan, which increased the differences with the United States; Bond yields hit new record highs.
“With the Bank of Japan policy makers sticking to their easy monetary policy, we expect one dollar to rise to around 135 yen in the very near future,” McKenna said.
But Sim Moh Seong, a currency analyst at the Bank of Singapore, said: “The Japanese currency, despite the recent weakness, is still safe, and the Japanese authorities have so far resorted to verbal intervention instead of the historical method of selling dollars and buying yen.” Seong noted that it is now clear that the BoJ is willing to stay hawkish by buying an unlimited amount of government bonds to limit the rise in 10-year yields. (agencies)
