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The market breaks the Bank of Japan

The Japanese yen continues to devalue against the dollar for the ninth month in a row. The Bank of Japan, despite the global trend of fighting inflation and increasing interest rates in leading economic countries, has left its monetary policy unchanged for a long time.

Despite recent evidence of a cooling economy in America and market expectations that the Federal Reserve will begin cutting interest rates next year, the yen has barely strengthened against the dollar, unlike other major world currencies. It is likely that the dollar’s correction is over and will continue to strengthen for some time, and the Bank of Japan’s foreign exchange interventions this year have been useless in strengthening the national currency, and the yen may continue to depreciate heavily against the dollar.

Leading analyst at Rabobank Jane Foley warns and does not rule out that the likelihood of a change in Fed policy is not that great, and the fall of the dollar has already weakened. Current realities and demand for the dollar will force the Bank of Japan to cancel negative rates, since there are no other instruments for resolving and maintaining a stable exchange rate of the national currency, with the exception of the same foreign exchange interventions that require large expenses in the budget, but against the main market, even if you are the strongest economically, taking steps makes no sense and is not effective.