Yield-Curve Control Experts Debate How Fed Could Juice Yen

A Federal Reserve yield-curve control policy would likely weigh on the dollar-yen, with the length of its target maturity dictating the pressure on the pair, according to Japan’s currency strategists.

Tokyo market players -- long used to trading under a YCC regime -- suspect the Fed will likely aim for the three-to-five year sector, where yields have modest room to decline. But a target further out the curve could weaken the greenback toward the 100 per yen level as investors react to the impact of increased dollar liquidity, higher fiscal spending and expected lower yields, they said in a series of interviews.