Svmuu News: Tatsuo Yamazaki, a former Financial Bureau Director at 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 current levels (to about 130 yen per U.S. dollar) and refuted views that the yen might weaken further.
Yamazaki said, “This is no longer a matter of fundamentals, but rather a question of how market expectations are shifting. But we are approaching a turning point.” He believes the current estimate that the yen is undervalued by 10% may be on the conservative side. “I wouldn’t be surprised if the yen rose to around 130. Frankly, that’s my view.”
At the same time, Yamazaki hinted that the market should not mistake the Japanese authorities’ recent apparent calm for complacency. He said, “They have already issued warnings, and anyone still holding short positions in the yen is well aware that they face the risk of being penalized by intervention—that is, being forced to close their positions. The Ministry of Finance has moved beyond the warning stage; the authorities have made it clear that they are willing to take action.” (Jin Shi)