Yen Has Already Given Up Half Of Its Gains From Joint US-Japan Intervention

Interest Rates Show No Big Reaction to Takaichi Fiscal Package

Source: Author calculation based on data from The Wall Street Journal

Key Points:

• Yen has given up half the gain in value caused by the joint US-Japan currency intervention and is now around ¥159/$

• If the pattern after past interventions continues, the market is likely to keep testing even weaker rates

• Would a hike in interest rates by the Bank of Japan change the yen situation?

• Many observers fear that Prime Minister Takaichi’s expansive fiscal policy is causing, or will cause, interest rates to shoot up

• Are these observers right?

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