Monetary guardians want to prevent too rapid JPY depreciation, but not a depreciation per se – Commerzbank

USD/JPY slumps under 144 amid threats to take action against the yen's depreciation trend if it continues. However, in the view of economists at Commerzbank, Japanese policymakers are only interested in avoiding a too rapid JPY depreciation.

Intervention threat against the JPY

“USD/JPY is already on the retreat again. However, I assume that this is actually more due to a slight correction of the dollar, after its rally yesterday. Because so far, the market seemed little impressed by the threat of intervention against the weakening yen.”

“The threat seems to carry little credibility above all because the Bank of Japan could support its currency in a much more obvious way, namely by raising interest rates. The fact that it has not done so so far casts doubt on whether it is really interested in a sustainably stronger yen. And indeed, the monetary guardians are likely to want to prevent too rapid a depreciation above all, but not a depreciation per se.”