What the market is saying about the U.S. intervention to prop up the yen
📰 source: cnbc_topnews · 💼 business
the us is helping japan prop up the yen. the currency jumped about 5% in recent sessions, hitting 157 to the dollar from above 163, its weakest in four decades, before paring gains monday.
ubs strategists teck leng tan and dominic schnider see little hope for a sustained rally, saying japan's policy mix won't generate yen strength. investors are also focused on unusual reports that washington may have sold euros, not dollars, to buy yen — a break from tradition. ing's chris turner said the dollar's resilience owes to uncertainty over whether the fed will hike in september, which supports treasury yields. hsbc analysts argue that without faster boj rate hikes and a clearer government stance on the yen, a downtrend in usd-jpy is hard to project.
peterson institute's robin brooks believes the coordination twist could weaken confidence in the yen, because markets will wonder why the us didn't fund yen buying with dollars.
why it matters: rare us intervention in yen markets signals currency instability and raises questions about fed rate path, keeping traders on edge.
source: cnbc_topnews
sentiment: +0.20 · impact: 0.70