The Japanese yen could jump to 95 per US dollar in the first half of the year and the Bank of Japan (BOJ) would likely have to respond even though it is running short on ammo, former BOJ director general Shigeto Nagai said in an interview, according to Bloomberg.
Nagai sees global investors fleeing to the anti-risk yen amid an economic slowdown in China, the US-China trade war and Brexit.
The BOJ, however, may not be able to do much, having exhausted its firepower over the last six years. Even so, the central bank would be compelled to respond as simply standing by while the yen strengthens will confirm to business leaders and markets that nothing can be done.
As of writing, USD/JPY is trading near 110.00, having hit a high of 110.16 yesterday.
Share
