BOJ Policy Exhaustion Means Yen Will Rise to 90, Sakakibara Says
- Currency could strengthen beyond 100 per dollar ‘at any time’
- Effectiveness of monetary stimulus ‘getting weaker and weaker’
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Japan’s former top currency official Eisuke Sakakibara says the nation’s central bank stimulus is nearing its limit, and the yen will gradually strengthen toward 90 per dollar next year.
Japan’s currency gained the most since July last week, touching 100.10 on Thursday, the day after the Bank of Japan shifted policy toward targeting the shape of the sovereign yield curve instead of money-supply expansion, while leaving the negative deposit rate and scale of asset purchases unchanged. The yen could break 100 “at any time,” and may “immediately” strengthen as far as 95, according to Sakakibara, who was dubbed “Mr. Yen” for his ability to influence the exchange rate while a senior Ministry of Finance bureaucrat in the 1990s.