The Yen is starting to strengthen against the dollar again, thanks to the government and beyond

The Japanese yen appreciated towards 156 per dollar on Tuesday, rising for the second consecutive session amid growing expectations that the Bank of Japan will raise interest rates again at its meeting next week.

Toshimitsu Motegi, a senior ruling party official, urged the BOJ to more clearly communicate its plan to normalize monetary policy through a steady rate hike, adding that an excessive decline in the yen was having a negative impact on the economy. So now the government also expects an increase in rates.

Prime Minister Fumio Kishida also said the normalization of the central bank's monetary policy will support Japan's transition to a growth-driven economy. The yen has risen about 2% over the past two weeks on suspected government intervention, with BOJ data suggesting that authorities may have purchased nearly 6 trillion yen on July 11 and 12 through intervention. The data also showed that Japan sold about $22 billion in U.S. Treasuries in May to raise dollars, building its vault for potential foreign exchange market trades.

Alongside the operations of the Japanese Central Bank and the government to protect the Yen, there are also expectations of a change in monetary policy by the USA: Inflation in the United States is reducing, while various forecast manufacturing indices have turned towards the negative.

Faced with these signals, it becomes increasingly likely that the Federal Reserve will ease interest rates in an attempt to revive the economy, even if this will happen after the elections.

---

---

The article The Yen returns to strengthen against the dollar, thanks to the government and not only comes from Economic Scenarios .

---

This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/lo-yen-torna-a-rafforzarsi-sul-dollaro-per-merito-del-governo-e-non-solo/ on Tue, 23 Jul 2024 10:37:39 +0000.