USD/JPY: Jumps in the Yen are likely – Commerzbank
05.04.2023, 09:23

USD/JPY: Jumps in the Yen are likely – Commerzbank

The Bank of Japan (BoJ) unswervingly stuck to its ultra-expansionary monetary policy. Antje Praefcke, FX Analyst at Commerzbank, expects to see jumps in the Yen.

Has the BoJ missed the right moment?

“I wonder whether the BoJ might have missed the right moment to credibly initiate an exit from its ultra-expansionary monetary policy. If it did not even fight the massive rise in energy prices like other central banks and did not use the opportunity of an overall inflation rate well in excess of 2% to change its approach, how likely is it that it will change its monetary policy ‘only’ because the core rate remains elevated?”

“How difficult will communication become if the best argument, that is an inflation rate well above target, is already weakened? Of course, that leaves core inflation as an argument, but a sudden focus on this argument would not seem that convincing to me either. That is why in my view the publication of the price data for March on 21st April will be very important.”

“I agree with my boss as far as JPY is concerned: jumps in the Yen are likely. Even former vice ministers recognize that by demanding a move away from the YCC.”

 

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