The Japanese Yen (JPY) no longer seems to weaken automatically after interventions in July by the Ministry of Finance (MOF) or the Bank of Japan (BoJ), Commerzbank FX strategist Antje Praefcke notes.

JPY continues gaining against the USD

“This may be due to the fact that ahead of the BoJ's interest rate decision next week more and more analysts see the risk that an interest rate hike could come now rather than in September. It will also be interesting to see what the BoJ says about its bond purchases and whether it could gradually reduce them.”

“If the BoJ becomes active as early as next week, this would mean that the interventions, although late, would finally be accompanied by a less expansive monetary policy and would therefore be less of a pure ‘leaning against the wind’.”

“As we have now fallen to the lowest level in USD/JPY since the beginning of June, I just wanted to write down my thoughts. However, I am still undecided about the long-term implications. You will certainly find out more about this here in the next few days.”