David Lebovitz, global market strategist at JPMorgan Investment Management, saidctrps4, if the yen continues to fall against the dollar, it may cause inflation expectations to be unstable.
"The market is signaling that 0 may be a magical level,ctrps4They don't want to fall below that level,"he said." I think at 160 you will see more rumors of potential interference."
The depreciation of the yen has pushed up Japanese consumer prices, but if the yen continues to depreciate, it will "do more harm than good."
Lebovitz said that "the depreciation of the yen will help improve inflation in the Japanese economy."
"The rate hike we saw earlier this year was more like a gesture than a step towards a significant tightening of monetary policy."
Note: Members of the Bank of Japan are closely monitoring the impact of the yen on inflation and expect a more rapid rate increase
Note: Hedge funds buy options to bet that the yen will fall back to 160 yen per dollar