Japan's Finance Minister reiterated that the government will respond appropriately to the yen's exchange rate.
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Market divergence in views on the yen's outlook has intensified, with a former Japanese finance official stating that a reasonable exchange rate should be around 130.
According to BlockBeats, on July 6th, as the USD/JPY exchange rate returned to around 162, market opinions on the yen's future trajectory became clearly divided. Tatsuo Yamasaki, former Vice Minister of Finance for International Affairs at the Ministry of Finance of Japan, stated that the current yen exchange rate has significantly deviated from a reasonable level, and a level around 130 yen to the dollar would be more in line with fundamentals. He added that he "would not be surprised" if the yen rose to that level. Meanwhile, some market participants held the opposite view. Jesper Koll, Executive Director of Monex Group, and Calvin Yeoh, an analyst at Blue Edge Advisors, believe that if the Bank of Japan continues to lag behind in the normalization of monetary policy, the USD/JPY exchange rate could even rise to 200 or higher. Yamasaki also warned that the Japanese government's recent lack of intervention in the foreign exchange market should not be interpreted as a lack of willingness to act. He stated that the Japanese Ministry of Finance has issued multiple warnings and demonstrated its willingness to intervene, and yen short positions still face the risk of being forced to close out. Market participants expect the Japanese government may still intervene in the exchange rate in mid-July.
South Korea's deputy finance minister said that the country is in close communication with Japan and its allies regarding exchange rate issues.
According to Odaily Odaily, South Korea's Deputy Finance Minister said on Thursday that South Korea is maintaining close communication with Japan and other major allies on foreign exchange issues, and warned that the won's exchange rate has seriously deviated from economic fundamentals. “We have always maintained close cooperation and information exchange with Japan and other relevant countries,” he said when asked whether South Korea would coordinate its exchange rate stabilization policy with Japan. “Currently, the Korean won exchange rate is out of sync with economic fundamentals.” When asked about any potential intervention measures, he declined to elaborate, but stated that the government is prepared to take stabilization measures should insufficient market liquidity lead to excessive exchange rate volatility. (Jinshi)
Nomura: Japanese Prime Minister's economic blueprint may influence the timing of the Bank of Japan's interest rate hike.
According to Mars Finance, on July 2nd, Nomura Research Institute economist Takahide Kiuchi stated that if Japanese Prime Minister Sanae Takaichi uses her "basic policy" economic blueprint (expected to be approved by the cabinet this month) to prevent further interest rate hikes, it could delay the timing of the Bank of Japan's next move. He said, "Even if the government opposes it, the Bank of Japan will raise interest rates when it deems it necessary, but it may respect the government's wishes regarding the timing of the rate hike to some extent." He added, "Government pressure against the Bank of Japan's rate hikes could further weaken the yen and lead to lower bond prices, which would undermine the stability of the country's economy and financial markets." (Jinshi)
Former head of Japan's foreign exchange industry: The yen may be undervalued by 20%, and short sellers still need to be wary of intervention risks.
According to Odaily Odaily, Tatsuo Yamazaki, former finance minister of Japan's Ministry of Finance and former head of Japan's foreign exchange policy, said in an interview on Monday that the yen should appreciate by up to 20% from its current level (about 130 yen to 1 US dollar), refuting those who bet on the yen potentially weakening further. Yamazaki stated, "This is no longer a fundamental issue, but rather a question of how market expectations will change. But we are approaching a climax." He believes that the current estimate of the yen being undervalued by 10% may be conservative. "I wouldn't be surprised if the yen rises to around 130. Frankly, that's my view." Meanwhile, Yamazaki suggested that the market should not mistake the recent apparent calm from Japanese authorities for complacency. He stated, "They have issued warnings, and anyone still holding short yen positions knows they face the risk of intervention and punishment—forced liquidation. The Ministry of Finance has gone beyond the warning stage; the authorities have indicated their willingness to take action." (Jinshi)
Will China Resources New Energy complete its merger and reorganization to jointly pursue a Shenzhen Stock Exchange listing? China Government-Enterprise Cooperation Fund responds.
Mars Finance reported on July 8th that China Government-Enterprise Cooperation Investment Fund Co., Ltd. (hereinafter referred to as "China Government-Enterprise Cooperation Fund") recently issued a statement saying that the company has noticed a false report circulating online titled "China Resources New Energy Holdings Co., Ltd. and China Government-Enterprise Cooperation Investment Fund Co., Ltd. Complete Merger and Acquisition to Jointly Pursue Listing on the Shenzhen Stock Exchange." The report is entirely false information and seriously contradicts the company's actual situation. According to China Government-Enterprise Cooperation Fund, since its establishment, all of its business activities have strictly complied with national laws, regulations, and regulatory requirements, and it has never conducted or authorized any entity to conduct any activities mentioned in the aforementioned false report. The company is not currently planning any mergers and acquisitions, restructuring, listing applications, or other capital operations, nor has it formulated any corresponding implementation plans. China Government-Enterprise Cooperation Fund also stated that it reserves the right to pursue legal action against any entity that forges or alters the company's seals, business licenses, or authorization documents, or impersonates the company or its employees to release false information, engage in fraud, or commit any other illegal acts that infringe upon the company's legitimate rights and interests. (Wide Angle Observation)
Sumitomo Mitsui: 10-year Japanese government bond yield may rise to 3% by the end of the year.
According to Odaily Odaily, Masahiro Ichikawa, a strategist at Sumitomo Mitsui DS Asset Management, said that as the Japanese economy remains on a steady growth trajectory, the yield on 10-year Japanese government bonds could reach 3% by the end of the year. He also predicted that if the government's large-scale investment plan can stimulate increased capital spending in the private sector, the Japanese stock market will have further room to rise. He added, "Regarding fiscal policy, Prime Minister Sanae Takaichi has expressed her intention to ensure market confidence, so the possibility of it becoming undisciplined seems low." The yield on 10-year Japanese government bonds rose 6 basis points to 2.830% at the latest. (Jinshi)