USD/JPY is flirting with 102.00 to end the week after falling to a three-month low of 100.82 earlier this week.
Kuroda attempted to boost the pair by saying the yen ‘shouldn’t appreciate’ in an interview with the WSJ today. He’s comments weren’t very effective but they might demonstrate a change in tactics.
Citi is out with a note saying Kuroda is jawboning “because the BOJ is being very reticent on policy ease.” They expect Kuroda to continue talking down the yen but the returns will be diminishing and that the BOJ is “probably afraid” to ease more without something delivered on the structural front.
It’s a great point. I think the BOJ probably won’t ease more and that leaves them in a bind and USD/JPY vulnerable on the downside.
