🔉 Japan FX Intervention Unlikely to Work Without Rate Hikes: Nomura G10 FX Strategy

USD rally happening faster than thought. Until we see the Ukraine situation resolving and China lockdowns easing, the dollar could keep a bid here. The Japanese authorities could intervene as USD/JPY trades above 130.0, but we saw the BoJ keeping its ultra-dovish stance. Given the rise in commodity prices and rates in the U.S., it will be very difficult for intervention to work in dollar-yen. Even if we saw headlines of authorities selling USD and buying JPY, yen strength would not last for more than a day, we would need the BoJ to raise interest rates for that to work.

- Nomura G10FX Strategy