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Yen breaks down, but FX intervention won’t change much
The Japanese yen has resumed its terrifying downtrend, crushed under the boot of a central bank that refuses to follow other economies in raising interest rates. With inflation dynamics still subdued, traders are betting the Bank of Japan won’t lift a finger to stop the yen’s bleeding when it meets in two weeks and that the government won’t dare intervene in the FX market. It has been an excruciating year for the Japanese currency, which has lost 25% of its value against the US dollar, tormented by one of the greatest episodes of monetary policy divergence in modern history. Central banks across the world are ... (full story)