IMF weighs in on the yen slump – driven by fundamentals (… Ya think???)

A senior IMF official (not a kid on work experience) with the remarks:

  • yen’s recent declines are driven by fundamentals, there is no reason to change Japan’s economic policy
  • no need to change BOJ’s accommodative monetary policy

The official was asked if intervention to buy the yen would be justified, says no:

  • we do not see disorderly market conditions in the FX market

Sheesh, anyone with a brain cell has been pointing to the monetary policy divergence between the BOJ (super-easy) and  Federal Reserve  (tightening up) as a key driver. The IMF have caught on now.

Interestingly, this from Morgan Stanley earlier in the week points to terms of trade also:

yen boj terms of trade 21 April 2022
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