The yen exchange rate has finally reached the 120 yen level per dollar.


How far will this depreciation of the yen go?


The word "Kuroda Line", which means around 125 yen, flies among market participants.

(Yosuke Nakano, Reporter, Ministry of Economic Affairs)

"Kuroda line" around 1 dollar = 125 yen

Not to mention Kuroda, the governor of the Bank of Japan, Haruhiko Kuroda.



On June 10, 2015, when the yen was depreciating to around 125 yen per dollar against the backdrop of large-scale monetary easing, also known as Kuroda Bazooka, Governor Kuroda said at the Finance and Finance Committee of the House of Representatives.



"It is unlikely that the yen will depreciate further from here." The



market that took this statement as a restraint against the excessive depreciation of the yen just because there was a sense of caution about the rapid depreciation of the yen. Great reaction.



The yen appreciated by more than 2 yen at one point.

“If you cross this line, the Bank of Japan will move



.” The “Kuroda Line”, which is about 125 yen per dollar, is deeply engraved in the hearts of market participants.



Since then, the market has continued to be far from this line, with 1 dollar = 100 yen to 118 yen, but on March 22, it entered the 120 yen range for the first time in 6 years and 1 month, and again. The "Kuroda Line" has become a hot topic for market participants.

Does the "Kuroda Line" work? What are the views of market participants?

Will it function as a line to stop the depreciation of the yen again this time?



● Market officials (1)


“The“ Kuroda line ”is still alive. I used to say it for 125 yen, so if I get close to it, I'll be asked for some kind of comment, and there's a good chance that I'll make a restraint statement


. Even if the yen depreciates, I think it will be up to 125 yen, and there is a possibility that profit-taking yen buying will come out from a sense of caution. ”



● Market officials (2)


“ 125 yen is the past yen depreciation phase The "Kuroda line" is quite conscious at the level that has been stagnant at.


Isn't the dollar attractive to investors and attractive to Japan enough to buy 125 yen dollars?


Inbound demand in Corona The lack of it is one of the reasons for the depreciation of the yen, but the level of 125 yen makes the yen feel too cheap, and it is also a thick ceiling that does not allow it to penetrate.



”The“ Kuroda line ”around 125 yen is recognized as the bottom price of the yen. Market officials say.



On the other hand, some say that the current depreciation of the yen is no longer at this level.



● Market officials (3)


“The current depreciation of the yen is not only the widening interest rate differential between Japan and the United States, but also the weakness of the Japanese economy, where the trade deficit is taking root


. The trade deficit is expanding due to the purchase of crude oil, which is causing the yen to depreciate


again. Even if the transaction is conscious of the "Kuroda line" in the short term, the Japanese economy is in the medium to long term. Unless Japan regains its growth potential, the depreciation of the yen will continue beyond the "Kuroda line". "



At the real effective exchange rate, which already shows the overall strength of the currency, the yen is at the lowest level in about 50 years.



For that reason, it seems that more attention will be paid to whether the current depreciation of the yen will exceed the "Kuroda line".

Scheduled to pay attention

The main opinions made by the policymakers at the monetary policy meeting on March 17th and 18th will be announced.



At a press conference after the meeting, Governor Kuroda said, "The depreciation of the yen is positive for the Japanese economy, and monetary tightening is not appropriate." Was there such an opinion?



At the OPEC Plus meeting, production in May will be discussed and the impact on crude oil prices will be highlighted.