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As reported by Bloomberg, the Japanese authorities are intensifying their “verbal intervention” to support the currency, but so far, with limited success in reversing the Yen's depreciation, despite the Bank of Japan's rate hike and exit from YCC (yield curve control).
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This is a clear indication that the BoJ has lost the credibility of the market
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If Japan abandons Yield Curve Control, interest rates will pop above 3% right away, creating a huge issue both in the domestic bond market and in the US because Japanese investors will start buying JGBs instead of our debt.
As for the Yen, it will appreciate considerably toward 130 sinking Japanese stocks. Neither the BoJ nor the Japanese Government want a strong Yen!
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