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5 May 2016
JPY: Reluctant to intervene ahead of the G7 meeting - BBH
Research Team at BBH, suggests that given the criteria that the US Treasury outlined last week in its report on the international economy and the foreign exchange market, there is some speculation that the MOF could order intervention.
Key Quotes
“Recall that intervention (boosting foreign reserves) by 2% of GDP and or persistent one-sided intervention would raise the ire of US officials. This ostensibly gives Japanese officials a way to square the circle. The rhetoric has escalated. However, while we recognize the risk, we think that barring a new leg down for the dollar, Japanese officials will be reluctant to intervene ahead of the G7 meeting (Japan hosts) later this month.”
Key Quotes
“Recall that intervention (boosting foreign reserves) by 2% of GDP and or persistent one-sided intervention would raise the ire of US officials. This ostensibly gives Japanese officials a way to square the circle. The rhetoric has escalated. However, while we recognize the risk, we think that barring a new leg down for the dollar, Japanese officials will be reluctant to intervene ahead of the G7 meeting (Japan hosts) later this month.”