The Bank of Japan decided to revise its monetary easing measures, and the yen exchange rate rose sharply in the foreign exchange market.
How did you see the exchange rate movements on the 20th?
We asked Hideaki Minami, Chief Dealer of Mizuho Bank's Financial Markets Department.
"A big move with a sense of surprise"
Q. The yen has appreciated sharply.
What was the dealing room like then?
A. It is no exaggeration to say that I am the busiest this year.
It was a completely unexpected day, so it was a very tense day.
As the exchange rate moved in one direction, I was surprised to find out what the Bank of Japan had announced.
At one point, the depreciation of the yen, which reached the 150 yen level to the dollar, peaked out, and the market was looking for reasons why the yen would return to a strong yen.
While the market did not expect the Bank of Japan to make any revisions, the market was surprised to see such a large move.
In addition, the meeting to decide monetary policy of overseas central banks ended last week, and many traders will be taking a break from this week, so I think that trading was thin, which also affected the volatility.
“A major turning point in monetary policy”
Q. Do you see this as a de facto monetary tightening?
A. I think we can regard this as a major turning point in the Bank of Japan's monetary policy.
Governor Kuroda has said that it is not an interest rate hike, but the market does not take it.
He's getting the message that from now on he's slowly moving towards tightening up.
“The yen will appreciate toward next year.”
Q.
What is your outlook for future exchange rates?
A.
I think the yen will appreciate in the medium term.
The yen was depreciating strongly this year.
One of the preconditions for this is the maintenance of the Bank of Japan's monetary easing policy.
Until now, the dollar has stood alone, but there are many opinions that inflation in the United States has apparently peaked out.