Doubts over Japan-US intervention, yen strengthens against trend

On September 7, the yen rose as much as 1.1% to 154.56, reaching its highest level since February and surpassing the peak seen after joint Japan-US intervention. The rebound was supported by growing expectations of a Bank of Japan rate hike and speculation over potential shifts in the asset allocation of the Government Pension Investment Fund (GPIF).

In the weeks prior, markets had been questioning the long-term effectiveness of coordinated intervention by Tokyo and Washington. Japan's top currency official, Masato Kanda, said last Friday that the government's stance on the yen remained unchanged, even as the currency strengthened against the dollar. JPMorgan strategists noted that if the yen breaks above the 155 level, further unwinding of large short positions could accelerate the yen's rally. (Jin10)

[TechFlow]