Friday, August 5, 2011

UBS: Japanese authorities will remain active

Analysts at UBS believe that Japanese monetary authorities understand that they won’t be able to reverse yen’s uptrend, so they have more modest goals.

The specialists think that the nation’s Ministry of Finance is trying to push USD/JPY to the range within it was trading before the US debt limit debates escalated negative pressure on the greenback. In their view, the realistic short-term target for the pair is situated in the 79.00 zone.

The bank underlines that 2 days ago Takehiko Nakao succeeded Rintaro Tamaki as Vice Finance Minister for International Affairs inheriting operational responsibility for intervention. That may mean that the MoF and the Bank of Japan may elaborate more active approach.

Japan’s Finance Minister Yoshihiko Noda has already pointed out that the nation’s monetary authorities may turn to the tactics widely used in 1995 that involved the chain of interventions that lasted 8 months. So, investors should be prepared to see the BOJ continuously acting at the forex market.

daily usdjpy 12-36

 Chart. Daily USD/JPY

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