Currencies
Battered Yen Puts Onus on Central Bank Comments to Turn a Corner
- Studies show signaling by policymakers may help currencies
- Shadow yields suggest the yen is cheap, Morgan Stanley says
A Japanese 10,000 yen banknote.
Photographer: Akio Kon/Bloomberg
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The yen — at multidecade lows — surged earlier this week after comments from Bank of Japan Governor Kazuo Ueda. Now the teetering currency is looking to seize on even more firepower from policymakers.
Despite the gains on Monday, the currency has been trading near levels that the government in 2022 spent more than $40 billion defending. Continued weakness prompted Masato Kanda, the vice finance minister for international affairs, to warn earlier this month that the government wouldn’t rule out any options to address yen movements.