US Monetary Policy and the Future of the Yen Exchange Rate: The Plight of the Japanese Authorities and Market Prospects
✔️ 177 yen per dollar within 1 year
Trends in the yen exchange rate are greatly influenced by domestic and international economic policies and market fluctuations. In particular, the high interest rate policy of the United States is the main cause of the depreciation of the yen, and the limits of the Japanese authorities' response are visible. We will analyze in detail the impact of monetary policy, the current status and limitations of the Japanese authorities' response, and future prospects.
✔️ The impact of US monetary policy
Currently, the high interest rate policy of the United States continues, and this is causing the dollar to appreciate. The policy stance of “longer and higher” set forth by the US Federal Reserve (Fed) maintains short-term interest rates at a high level, and investors prefer the US dollar because of this. As a result, the dollar became stronger, and the trend of yen weakening relatively continues. ・There is a common understanding in the market that as long as US interest rates remain high depending on the US financial authorities, the depreciation of the yen will continue.
✔️ The response of the Japanese authorities and its limitations
The Japanese authorities have intervened in the exchange rate several times until now. In 2024/4, a yen purchase intervention on the scale of 9.8 trillion yen was carried out. However, the effect was limited. Although the yen rose temporarily, it quickly fell, and the result was that it once again fell below the level before the intervention.
[Views on education 💡]
Until the US financial authorities actually implement mitigation, Japan's efforts will not be effective. As is said, unless US interest rates fall, Japan's exchange intervention will not last long.
✔️ Impact of Japan-US interest rate differences
The main reason for the depreciation of the yen is the difference in interest rates between Japan and the US. The current market expected that the Bank of Japan would break away from the ultra-low interest rate policy and that the US monetary authorities would start cutting interest rates, but in reality, against the backdrop of steady growth in the US economy and deep-seated inflation, the Fed did not cut interest rates. The Bank of Japan also raised interest rates only slightly, and the Japan-US interest rate difference remains large.
✔️ Future outlook
There is a possibility that the US personal consumption expenditure (PCE) price index will have a major impact on the yen exchange rate in the future. The core PCE price index is said to slow down, and there is a possibility that this will support the US financial authorities' interest rate cuts by the end of the year. If US interest rate cuts are realized, the trend of yen depreciation may ease. Conversely, if inflation remains high, the Fed will be forced to continue its high interest rate policy, and there is a possibility that yen depreciation will progress further.
#投資 #ドル円 #為替 #NISA #老後 #資産 #資産運用
#pound #dollar #yen #euro #mexican peso #turkish lira
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
Read more
Comment
Sign in to post a comment
【心理学×投資】テクニカル分析/LIVE配信366DAY ＝先進国40：新興国60 /企業案件３社/登壇実績/
390Followers
1966Following
1450Visitors
Follow