Dollar Reclaims 160 Yen as Market Forces Trump Intervention
RBC Capital Markets recommends buying dips in the USD/JPY currency pair as the dollar returns to 160 yen, just five weeks after Japanese authorities intervened in late April and early May.
The speed of the dollar's recovery is seen as a test of Tokyo's resolve, with market forces reasserting themselves despite intervention efforts.
RBC director Abbas Keshvani points out that two structural headwinds are weighing on the yen: elevated energy costs compounded by the ongoing Hormuz closure and domestic asset managers' reluctance to rotate into yen-denominated assets.
Finance Minister Katayama reaffirmed Tokyo's readiness to take decisive action, but also acknowledged the need for balance between fiscal sustainability and pro-growth economic measures.