Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Yen Intervention Risk at Six-Year High, Morgan Stanley Says

Aug. 20 (Bloomberg) -- The probability that the Bank of Japan will intervene in foreign-exchange markets for the first time since March 2004 is at a six-year high of 51 percent, according to a Morgan Stanley model.

The strengthening of the yen and its misalignment from economic fundamentals is increasingly likely to spur government response, Stephen Hull, London-based head of global currency strategy at Morgan Stanley, wrote in a note dated yesterday.

Japanese policy makers are facing pressure to aid the economy after the yen’s climb to a 15-year high of 84.73 against the dollar on Aug. 11 stoked concern that exporters’ earnings could weaken and deflation might deepen. Trade Minister Masayuki Naoshima said yesterday that the yen is too strong against the dollar and should drop about 6 percent to help exporters.

Japan hasn’t intervened in the currency markets since March 16, 2004, when the yen was at about 109 per dollar. The Bank of Japan sold 14.8 trillion yen during the first three months of 2004, after record sales of 20.4 trillion yen in 2003. The currency ended 2004 at 102.63 to the dollar.

Japan last bought the currency in 1998, purchasing 3.05 trillion yen as the exchange rate weakened to 147.66. The yen was little changed at 85.39 per dollar yesterday in New York.

To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.