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Japanese yen weakens past 159 per dollar as rate-hike clarity lags
Commerzbank economist Volkmar Baur links the yen’s softness to currency-hedge adjustments tied to a rally in Japanese stocks, alongside signals from the Bank of Japan that traders see as insufficient.
The Japanese yen weakened again above 159 per US dollar, according to notes from Commerzbank strategist Volkmar Baur cited by FXStreet, despite recent Japanese intervention and signals from the Bank of Japan.
Baur said the yen remains fundamentally too weak in his view, pointing to strong current account and credit growth data, while arguing that the timing and messaging around the Bank of Japan’s potential rate-hike path is still leaving markets uncertain.
FXStreet also highlighted Baur’s view that rising Japanese equities could be weighing on the currency. He noted that hedged foreign positions in Japanese stocks can require adjustments as stock prices rise, which tends to add pressure on the yen.
Baur cited a Japan Exchange Group survey showing about 35% of Japanese stocks are held by foreign investors, and said this dynamic may keep the yen under pressure until the Bank of Japan clarifies its rate-hike plans.