Japan and the US will step into currency markets again if the yen resumes its slide, says former Bank of Japan policymaker Atsushi Takeuchi. He expects USD/JPY to hold a range of 155 to 162 for now, with the recent joint intervention already removing traders' one-way bets against the yen.
Former Bank of Japan policymaker Atsushi Takeuchi says Japan and the US will intervene again in currency markets if the yen resumes weakening against the dollar. He argues the recent joint effort by the two countries already reset the market's expectation of one-way losses for the yen.
Takeuchi says the US standing behind Japan's intervention carries symbolic weight, since it shows there are effectively no constraints stopping Japanese authorities from stepping into the market. As a result, he argues traders should rethink betting against the yen: "I won't think about making bets on USD/JPY now."
Takeuchi expects USD/JPY to trade in a range around 155 to 162 for now. He adds that if the yen holds stronger than 160 per dollar for another week or so, markets will treat that level as a near-term bottom and start bidding the currency higher.
Should the yen instead show signs of drifting lower again, Takeuchi says both sides will step back into the market. He argues the US risks losing credibility by allowing the yen to weaken after getting so deeply involved in Japan's efforts, so another round of intervention would follow.
Source: Investinglive RSS Breaking News Feed
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