The yield curve control of the Bank Japan is weighing heavily on the yen that intervening in the market to buy the currency would have little impact, according to Goldman Sachs Group Inc. strategist Karen Reichgott Fishman as reported by Bloomberg.
Karen wrote in a note that, they find it hard to see intervention driving a sustained appreciation,” . She also added that rising U.S. yields should keep pushing the yen lower.
So far, the government has limited itself to verbal warnings, with comments coming again on Thursday as the yen broke through 130 to dollar after the BOJ doubled down on its ultra-easy settings.
Meanwhile, an official from the Finance Ministry said recent moves warranted extreme concern and that appropriate actions would be taken if needed. The comments had minimal affect on the currency.
“The path of least resistance for USD/JPY is still higher for now — with 135 now looking inevitable,” Bipan Rai, head of foreign-exchange strategy for North America at Canadian Imperial Bank of Commerce, wrote in a note.
“Sure, they could intervene but it’s a waste of time and resources really,” he said.
It appreciated about 0.2% to 130.63 at 12:40 p.m. Tokyo time on Friday, after trading at the weakest since 2002 on Thursday.
The last time Japan intervened the yen’s movement was during the Asian financial crisis in 1998, at a time when the currency reached around 146 to the dollar..
