Reported 12 months ago
As of 4:10 pm on July 2, 2024, the US Treasury yield surged again, leading to a rebound in the US dollar and pushing the Japanese yen to further depreciate to 161.75 against the US dollar, marking a 38-year low. Vanguard, the world's second-largest asset management group, predicts that if the Bank of Japan's quantitative tightening measures announced at the end of the month fall short of market expectations, the yen may drop below the 170 level. The yen has continuously hit new lows, prompting Japanese Finance Minister Suzuki Toshikazu to express concern over the exchange rate but refrain from commenting on specific levels. Experts suggest that a lack of intervention by the Bank of Japan stems from the weakening yen, the rise in US Treasury yields, and Japan's delay in raising interest rates. Despite potential intervention, the market may perceive it as an opportunity to buy the dollar. Vanguard forecasts that if the Bank of Japan's reduction in bond purchases is less than expected, the yen could be pushed towards 170. This milestone would follow the yen's decline below 161. Koutny, Vanguard's International Interest Rate Director, noted that if the Bank of Japan only reduces its monthly bond purchases from 6 trillion yen to 5.5 trillion or 5 trillion yen at the July meeting, the yen may further depreciate towards 170. Reuters surveyed 19 banks, brokerages, insurers, and asset managers, with respondents expecting the Bank of Japan to reduce bond purchases by 16.1 trillion yen in the first year, bringing monthly purchases down to 4.65 trillion yen. In the second year, purchases will further decrease to 3.55 trillion yen per month. The survey was conducted from June 25 to July 1. Prior to announcing its quantitative tightening measures on July 31, the Bank of Japan will meet with bond market traders on the 9th or 10th to gather their views on the reduction plan.
Source: YAHOO