J. Safra Sarasin analyst Claudio Wewel said the recent yen rebound looks
fragile. As markets price further rate hikes from major central banks, USD/JPY
has risen to around 158, reviving speculation of Japanese FX intervention. Wewel
expects USD/JPY could linger near the 160 area in the short term, saying the
Bank of Japan’s signal of accelerated tightening may not be enough to sustain a
durable yen recovery. He warns the yen still faces headwinds from stronger US
macro data, elevated energy prices and concerns over Japan’s debt
sustainability, and judges the BOJ may still be lagging other G10 central banks
based on recent market reaction.
