Japanese Yen Weakens As BoJ Intervenes To Defend Bond Yield Target
March 28 2022 - 12:36AM
RTTF2
The Japanese yen lost ground against its major counterparts in
the Asian session on Monday, after the Bank of Japan intervened in
the forex market to contain a spike in government bond yields above
its target band.
The BOJ offered to purchase 10-year bonds in unlimited amounts
to defend the yield target of 0.25 percent.
The intervention came after the yield on the 10-year bonds moved
up toward the implicit 0.25 percent upper limit that was set around
its 0 percent target.
The 10-year JGB yield has been moving up along with long-term
treasury yields as the Federal Reserve plans to tighten monetary
policy aggressively in the coming months.
The Fed's policy stance is in contrast with the BoJ, which is
expected to maintain ultra-loose monetary policy to support the
economy.
Asian shares are mixed as investors weighed impact of a high
inflation and tighter monetary policy on economy.
The yen depreciated to 123.66 against the greenback, a level
unseen since December 2015. Should the yen slides further, 125.00
is likely seen as its next support level.
The yen declined to a 6-1/2-year low of 132.46 against the franc
and near a 6-year low of 162.83 against the pound, off its early
highs of 130.98 and 160.77, respectively. Immediate support for the
yen is possibly seen around 134.00 against the franc and 164.00
against the pound.
The yen touched 6-1/2-year lows of 93.21 against the aussie and
99.13 against the loonie, down from its prior highs of 91.54 and
97.69, respectively. The yen is likely to find support around 96.00
against the aussie and 102.00 against the loonie.
The yen fell to 135.62 against the euro, its weakest level since
February 2018. On the downside, 137.00 is possibly seen as its next
support level.
The yen hit 86.14 against the kiwi, setting more than a 7-year
low. The yen may locate support around the 90.00 level.
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