You Shall Not Pass Japans 160 FX Wall

The Bank of Japan has established 160 as a firm 'line in the sand' for USD-JPY, conducting massive interventions to prevent further depreciation. Despite short-term geopolitical headwinds, UniCredit remains constructive on the Yen over the medium term as BoJ normalization approaches.

Key Takeaways

• 1.The Bank of Japan (BoJ) is actively intervening to prevent USD-JPY from crossing the 160 threshold, spending JPY 5.48tn on April 30th alone.
• 2.Monetary policy normalization is expected to resume as early as June 2024, with rates potentially reaching 1.25% by 4Q26.
• 3.Geopolitical tensions in the Middle East and interest rate differentials remain primary headwinds for the Yen in the short term.

Table of Contents

• THE CONTEXT
• THE DATA
• OUR VIEW
• OTHER THINGS TO NOTE
• FX markets remain cautious after Trump considers Iran replies unacceptable
• PM Starmer’s speech this morning may increase attention on sterling
• TODAY'S DATA RELEASES
• Author
• Editors
• Legal Notices

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