Mizuho Bank: If the Fed believes that the economy is heating up, USD/JPY may test last year's highs

Sina Financial News Shoki Omori, chief strategist at Mizuho Bank, said that if the Fed may keep interest rates unchanged for a longer period of time at a later meeting, USDJPY may test the 151.9 (2023 high) area. Omori said that if the Fed says that the U.S. economy is hotter than expected, and they don't see the need to cut rates as many times this year as initially thought, then USDJPY could test that position. On the issue of the foreign exchange market, Japan's Ministry of Finance has always said that they are concerned about the speed of the yen's fluctuations. While it is unlikely that there will be actual intervention at this time, it is likely that they will first control the situation through verbal intervention. Omori said that the impact of Japanese inflation on the yen will not be as great as people think. The Bank of Japan is likely to take a wait-and-see approach for at least a few months as they claim they will not continue to raise interest rates. Unless demand-led inflation rises excessively, it is difficult to see the BOJ rushing to adjust policy quickly.