Yen Weakness Persists Despite Record Interventions

Commerzbank's Michael Pfister warns that renewed weakness in the Japanese Yen could persist despite record FX interventions. The USD/JPY exchange rate has repeatedly broken above 160, driven by expectations for Bank of Japan rate hikes rather than intervention.

Pfister argues that recent hawkish comments from the BoJ have boosted speculation about upcoming interest rate increases. However, he cautions that failure to deliver a hike at the next BoJ meeting could lead to another yen weakness.

The yen's recovery hinges on action from the Bank of Japan, Pfister emphasizes. He notes that coordinated FX market interventions have reached a new record level but have merely delayed the upward trend in USD/JPY.