NORGES: RATES PROBABLY AT CURRENT LEVEL QUITE SOME TIME

RATES MAY NEED TO BE ON HOLD LONGER THAN ENVISIONED: NORGES

MNI: NORGES BANK LEAVES RATES UNCHANGED AT 4.50%

MNI WATCH: CNB Seen Cutting 50Bps to 5.25%, Signal Slower Pace

MNI China Daily Summary: Tuesday, April 30

MNI BRIEF: China To Keep Tackling Risks In Real Estate, Debts

MNI: BAKER HUGHES US RIG COUNT 605; OIL RIGS 499; GAS RIGS 102

BoE Data Watch

RBA Data Watch

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

MNI BRIEF: Poilievre Calls QE 'Scam' And Would Limit BOC Remit

MNI: Growth Drag From Net Zero Carbon Goal Can Be Offset-OECD

© 1982-2023 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

JPM See Risk of Japan/South Korea Intervention "Extremely Low"

JAPAN
Homepagemarkets-real-timeBulletMarketsFixed Income BulletsForeign Exchange BulletsBank of Japan (BOJ) Market News
  • JP Morgan write that the hurdle for joint Japan/South Korea currency intervention is high, and the possibility of “extremely low” despite the statement made by their respective finance ministers.
  • They see joint intervention as more difficult than unilateral, with joint interventions tending to only be conducted in crises. They also see more difficult cooperation between South Korea and Japan because South Korea is not a member of the G7, and therefore their FX regimes are more difficult to coordinate – particularly as the KRW is not fully convertible.
  • On unilateral Japanese intervention, they write that they do not expect the Japanese MoF to come into the FX markets immediately based on any approval from the US.
  • They think it is unlikely that the MoF’s stance has changed significantly after the trilateral meeting. Whether JPY FX moves are excessive or not and whether FX is in line with fundamentals should remain important. Given that, they believe that current USD/JPY moves are not “excessive” necessarily, and the recent USD/JPY rally has been driven by broad USD strength, not by speculative JPY-selling. This leaves the MoF to continue “wait and see” mode for a while.
189 words

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
  • JP Morgan write that the hurdle for joint Japan/South Korea currency intervention is high, and the possibility of “extremely low” despite the statement made by their respective finance ministers.
  • They see joint intervention as more difficult than unilateral, with joint interventions tending to only be conducted in crises. They also see more difficult cooperation between South Korea and Japan because South Korea is not a member of the G7, and therefore their FX regimes are more difficult to coordinate – particularly as the KRW is not fully convertible.
  • On unilateral Japanese intervention, they write that they do not expect the Japanese MoF to come into the FX markets immediately based on any approval from the US.
  • They think it is unlikely that the MoF’s stance has changed significantly after the trilateral meeting. Whether JPY FX moves are excessive or not and whether FX is in line with fundamentals should remain important. Given that, they believe that current USD/JPY moves are not “excessive” necessarily, and the recent USD/JPY rally has been driven by broad USD strength, not by speculative JPY-selling. This leaves the MoF to continue “wait and see” mode for a while.