Institutions: The Federal Reserve may have created opportunities for Japan to intervene in the foreign exchange market

On July 31, TSLombard economist Rory Green said that Federal Reserve Chairman Walsh's speech after keeping interest rates unchanged yesterday was interpreted by the market as dovish, which may create an opportunity for the Bank of Japan to support the yen. Currently, the market is speculating that Japan's official intervention in the foreign exchange market may be behind the intraday decline of about 2.5% in the US dollar against the yen. Green said that the Fed's dovish stance may provide a favorable opportunity for Japan's Ministry of Finance to intervene in the currency market. He also pointed out that Japan's previous foreign exchange market interventions were often accompanied by central bank interest rates. "If the Bank of Japan moves (to raise interest rates) tomorrow, it will still surprise the market, but this meeting is no longer without suspense," Green said.