Goldman Sachs: Japan's over $1 trillion in foreign exchange reserves can be fully monetized via the Federal Reserve's FIMA facility, providing ample ammunition for further yen intervention
Karen Fishman, a research strategist at Goldman Sachs, stated that Japan's approximately $200 billion in dollar cash or cash equivalents is sufficient for several rounds of intervention similar to last month's record scale. More critically, Japan's Ministry of Finance plans to use the Federal Reserve's FIMA repo facility, which could theoretically convert its entire $1 trillion reserve of U.S. Treasuries into usable dollar cash without selling Treasuries in the secondary market. Praneet Shah, head of FX options trading at Goldman Sachs, noted that the FIMA facility makes a $1 trillion intervention potential within reach, which has led to a significant increase in bullish sentiment towards the yen among clients. Although the effect of intervention might only be "buying time" rather than a sustainable solution, Goldman Sachs believes that the pace of interest rate hikes by the Bank of Japan (BOJ) and U.S. economic data will be the core variables determining whether to intervene again.
Source:华尔街见闻 · Source Link
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