With the yen weakening to a one-year low against the dollar, the chances that the authorities will intervene to stem its slide have risen. That would probably have little success if interest rate differentials moved further against the yen. But with the exchange rate substantially undervalued, our view that US Treasury yields will fall over the coming months suggests that intervention could push the yen towards fair value.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services