Japanese Yen: Market probes intervention risk – ABN AMRO
Georgette Boele at ABN AMRO highlights persistent weakness in the Japanese Yen as investors test authorities’ tolerance for depreciation. Fiscal expansion and a dovish Bank of Japan stance weigh on the currency, while Japan’s energy-importer status adds pressure. With stretched long-Dollar/short-Yen positioning and explicit upside levels, she warns that any intervention-driven reversal in USD/JPY could be sharp and lasting.
Authorities’ tolerance for yen weakness
"Despite these factors, we noted in last week’s FX Weekly that the risk of intervention in the yen had increased."
"USD/JPY is now approaching last week’s high of 162.84 and could move towards 164.50."
"The fact that intervention has not yet happened does not mean it will not happen."
"As we mentioned last week, positioning remains stretched: the market is long US dollars and very short yen."
"If sentiment turns in favour of the yen, be it because of intervention concerns or other factors, the rebound could be sharp."
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Wall Street giants collectively raise rate hike forecasts, US Treasury futures continue to fall, gold drops over 1% to break 4000
After the US October CPI exceeded expectations, Goldman Sachs and Nomura added a forecast for an interest rate hike in March next year, while Deutsche Bank included a forecast for a rate hike in January next year. Currently, the market has fully priced in a 25 basis point rate hike in December, with a 13% probability for a 50 basis point hike. On Wednesday, the US Treasury spot market was closed, but Treasury futures continued to fall, with corresponding yields rising by about 2 to 4 basis points, and spot gold came under pressure, dropping by 1.1%.
No Need to Worry About the Cooling Down of AI Data Center Construction? The US Import Boom Is Unlikely to Subside in the Short Term, Real Impact May Come in 2029
It takes an average of 4.8 years from finalizing investment to starting construction of a data center project, and an additional 2.6 years from construction start to becoming operational. Servers usually cannot be installed until after the building structure and racks are completed. For trade partners such as Taiwan (China), South Korea, and Mexico who rely on US data center supply chain demand, the inertia in construction timelines provides at least a one- to two-year buffer for future exports.
Federal Reserve Major Debate: When Should the Tenure of “Number Three” Williams End?
The main point of contention is whether Williams should step down in June 2028, upon completing a full 10-year term, or in June 2027, when he reaches the mandatory retirement age of 65. Analysts point out that the Federal Reserve Board holds ultimate discretion; if he leaves early, Fed Chair Waller would be able to assert greater control over the appointment to this critical position. However, forcing Williams to shorten his term could easily be interpreted as political manipulation. Williams himself is expected to serve until June 2028.
Crypto prices
More
