Bessent lays out case for yen intervention as risk-on mood fails to weaken dollar
A market observer argues Japan has grounds to intervene in the yen, as rising risk appetite typically pressures the dollar but US policy uncertainty and economic strength keep the greenback supported.
Hopes for another Gulf ceasefire and falling oil prices have pushed market rates lower and lifted equities, creating a risk-on environment. Typically, such conditions would drag the dollar down.
However, the greenback has not weakened this time. According to the note, uncertainty around Federal Reserve policy and a healthy US economy are preventing the dollar from declining.
The view provides a rationale for potential yen intervention, suggesting Japanese authorities may have a window to act if the currency continues to slide despite the supportive risk backdrop.
Source: FXStreet Forex News