Goldman Sachs has expressed skepticism regarding the necessity of an urgent intervention in the Yen, similar to what happened last Fall.
The bank cites three main reasons for this viewpoint:
Key Points:
1. Muted Year-over-Year Moves: Goldman notes that the year-over-year movements in the trade-weighted Yen and USD/JPY have been much more muted compared to the period when interventions took place.
2. Decline in Other Cost-Push Factors: The bank points out that cost-push factors such as energy and commodity prices have declined, which reduces the urgency for intervention.
3. Potential BoJ Policy Tweak in July: Goldman Sachs’ economists expect the Bank of Japan (BoJ) to make adjustments to its Yield Curve Control (YCC) policy in the July meeting, which they believe should alleviate some of the near-term pressure.
Additionally, Goldman mentions that if 2022 is used as a reference, verbal intervention typically began well before actual intervention took place.
Weekly candles USD/JPY.
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