Who’s in control of Japanese monetary policy? Tokyo or Washington?

The US Treasury Department has unexpectedly intervened in Japan's foreign exchange market, making outright purchases to support the yen. This move has significantly increased the chances of the Bank of Japan raising interest rates at its upcoming policy meeting. The shift in expectations from less than 30 per cent to almost 100 per cent indicates a major change in the market's perception of monetary policy control. This development is significant for markets as it suggests a stronger influence of external factors on Japan's monetary policy.

Why it matters

The US Treasury Department's intervention in Japan's foreign exchange market signals a coordinated effort to stabilize the yen. This could lead to increased confidence in the Japanese economy and attract foreign investment.

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MeridStreet does not reproduce source articles. The summary and analysis above are generated by MeridStreet from public headlines and its own market model; the original reporting belongs to South China Morning Post. For information only — not financial advice.