JPY remains very weak. Overview for 26.03.2024

The Japanese yen, paired with the US dollar, has halted its decline. The current USDJPY exchange rate stands at 151.35.

The market is closely monitoring the development of Japanese authorities' interventions. So far, all actions have been limited to verbal declarations.

Yesterday, Japan's Finance Minister Shunichi Suzuki noted that interventions to stabilise the yen's positions are not ruled out. He remarked that the yen's heightened volatility currently creates significant uncertainty for trade processes and business relations, adversely affecting the country's economy.

This is far from the first verbal intervention in recent times. Earlier, Masato Kanda, a prominent monetary policymaker in Japan, also noted that the prevailing fluctuations in JPY do not correlate with fundamental factors.

There is now significant uncertainty about whether the Bank of Japan will opt for financial intervention to bolster the yen. Nevertheless, this remains a possibility if the USDJPY pair approaches 152.00.

The critical reason contributing to the yen's weakness is the difference in interest rates between the BoJ and the US Fed.