Despite coordinated intervention, the yen's depreciation has resumed, with the dollar-yen rate moving once again toward a weaker yen. Long-term interest rates are nearing the 3% threshold.
This article, published as the September issue of Market Karte, analyzes current trends in foreign exchange and interest rates. Despite the effects of intervention, the yen has continued to depreciate, and it presents views that take into account the supply-demand environment and market sentiment.
Long-term interest rates are approaching levels around 3%, and the report notes that changes in financial conditions could affect market trends going forward. Interest rate movements are considered in relation to the Japan-US interest rate differential and foreign exchange risk.
The author is Chief Economist Ueno Tsuyoshi (上野剛志), and the article was written by the Economic Research Department. Published as part of NLI Research Institute Monthly, it summarizes trends in the financial markets and foreign exchange.
The report sets out the outlook from the perspective of dollar-yen and interest rate volatility risks, including the impact of a shift in the Bank of Japan's monetary policy and the yen's weakening trend. It also points to the reassessment of foreign exchange intervention and the impact of interest rate policy as related topics.