Market Expects BoJ Intervention on Yen as Weakness Persists, But Impact Uncertain

According to Jane Foley of Rabobank, market expectations for a potential Bank of Japan (BoJ) intervention to weaken the yen on Friday are rising, capitalizing on lighter trading conditions during the U.S. holiday.

Foley noted that further yen intervention appears inevitable, but intervention alone is unlikely to reverse market sentiment on the currency. The yen's weakness stems partly from U.S. dollar strength, while rising Japanese equities may prompt foreign investors to increase hedging measures against yen depreciation.