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EBC Markets Briefing | Japan renews push to support yen along with G7

The yen edged higher on Monday, but it is yet to stage a convincing rebound. A yearly loss of nearly 11% has confounded many traders amid expectations of policy convergence to turn the tide. The G7 finance leaders on Saturday reaffirmed their commitment cautioning against excess volatility in foreign exchange rates, which was seen as a permission for Japan to intervene later on. The agreement followed new warnings from Japan's top currency diplomat Masato Kanda, saying that Tokyo was ready to step into the market "any time" to counter speculative yen moves. Still it is not clear how long the group members will tolerate the intended manipulation. US Treasury Secretary Janet Yellen last week called for exchange rates to be determined by markets again. BOJ Governor Kazuo Ueda signalled that a slump in GDP in Q1 did not change the view that economy was on track for a moderate recovery, although analysts had argued the weak data would hinder rate hikes. Japanese stocks are more welcomed. The Nikkei is forecast to trade at 40,750 at the end of this year, supported by a firm corporate outlook and a solid global economy, according to a Reuters poll. Uncertainties about the yen's move against the dollar has also hurt sentiment the stock market, but some said the negative impact of the currency's possible gain against the dollar will be limited. EBC Investment Strategy Report Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC Financial Group or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

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Publication date:

2024-05-27 06:40:33 (GMT)

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