The yen's weakness will be difficult to reverse in the short term, and verbal intervention is unlikely to change the fundamental situation.
智通财经2026/07/29 13:46- Analysts at Swiss Union Bank point out that the Bank of Japan is unlikely to implement any major policy adjustments at this Friday's policy meeting, nor is it expected to signal a faster pace of tightening. As a result, the weak trend of the yen is unlikely to experience a substantive reversal in the short term.
- The yen continues to be weighed down by negative real interest rates, with inflation-adjusted real yields in deeply negative territory. This keeps the yen at a disadvantage in carry trades.
- Even if the Bank of Japan would internally prefer a stronger yen, without a credible commitment to aggressive rate hikes, mild statements at the policy level are unlikely to drive a sustained appreciation of the yen.
- Going forward, investors should expect Japanese authorities to issue more verbal warnings about intervening in the foreign exchange market. However, the practical effect of such statements is limited, and the yen will likely remain weak until the fundamental interest rate gap disadvantage is addressed.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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