ββ#ForexChief #Kuroda #forexnews #BOJ #worldnews #Yen #FumioKishida #USDJPYβ
π―π΅ What is dissatisfied with Β«Mr YenΒ» or how much money Japan hasβ
ποΈ BOJ remains the only central bank in the world with negative rates but does not intend to change monetary policy. Japan spent Β₯6.3499 trillion in October. ($42.8 billion) on exchange interventions, but the BOJ assures that the possibilities to support the yen are endless. The regulator has in mind deferred imports in the form of huge gold reserves.
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Former Vice Minister of Finance of Japan Eisuke Sakakibara, known as Β«Mr YenΒ» for trying to put pressure on the exchange rate with the help of verbal interventions, expects USD/JPY in the 170 zones next year. Sakakibara's forecast is especially interesting in a situation where Japanese officials did not confirm the facts of the forced correction of the exchange rate.
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At the end of September, Japan had about $1.2 trillion in reserves, with about 10% in the form of deposits in foreign central banks and BIS. This capital can be used to sell dollars and buy yen in an intervention. Approximately 70% of all foreign exchange reserves in Japan are held in the form of US Treasury bonds β these too can be easily converted into cash. You can also use gold, IMF deposit reserves and assets in IMF SDRs for these purposes.
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With such stocks, more than one intervention can be carried out. But is it worth resisting?
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A weak currency stimulates the growth of domestic and global investment in the Japanese economy, but now the rate is close to the pain point of 150 β the balance of risks becomes asymmetrical. In a year, the yen is simply bound to return to the Β₯115/120 range.
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Sakakibara is confident that the Central Bank will start raising interest rates after the term of office of the head of BOJ Haruhiko Kuroda expires in April 2023, and new fighters will have to save the yen. The question is whether Prime Minister Fumio Kishida will seize this unique opportunity.
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But there is another problem that Japanese financiers prefer not to talk about. And we will tell you in the next post.
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Profits to yβall!