The sharp rebound during the day could be attributed to some intervention by Japanese authorities to support the local currency, although no official announcement has been made so far. Alongside the modest decline in the US dollar.
Therefore, I believe any clear and sustainable movement for the Japanese yen to rise still seems out of reach in the wake of the cautious approach taken by the Bank of Japan (BoJ) towards further policy tightening and uncertain interest rate outlooks.
The wide interest rate gap between the United States and Japan will remain for some time, alongside a generally positive risk tone, which could mitigate the strength of the Japanese yen.
Bank of Japan Governor Kozo Oda provided little evidence of the timing of the next interest rate hike and ruled out a complete shift to bond purchase reductions, warranting caution for those betting on the sustainability of the Japanese yen's rise.
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