Lack of remittance flow
This interest rate picture is also keeping Japanese investors' large cash flows abroad, where they can earn more profits. This causes the yen to lose support from remittance flows.
Japanese investors are holding about 3,000 billion USD in foreign bonds and yen trading transactions.
BoJ's ability to intervene
At 151.27 yen per dollar, the Japanese currency is now very close to the 151.94 yen per dollar level that prompted the BoJ to intervene in 2022. Markets are predicting 152 yen per dollar may be the level for the BoJ to intervene this time, although Japanese officials emphasized that they did not set a target threshold.
BOJ headquarters in Tokyo. (Source: AFP/TTXVN)
HSBC bank analysts believe that the current situation is more difficult than in 2022, especially when the USD is not at high levels like in the period of October-November 2022.
Therefore, these experts believe that Japan's intervention efforts to support the yen this time will have little effect. This could create further instability for the yen and other currencies./.
