The famous Mr. Yen says the Japanese currency can strengthen to 100 per dollar by the end of the year. Eisuke Sakakibara earned his nickname when he served as vice minister of finance and achieved mastery in managing exchange rates in the 1990s. Nowadays, Eisuke Sakakibara still easily recognizes currency market trends. He successfully predicted the yen’s appreciation to 115 and then 110 per dollar.
Japan’s national currency hit a fresh high again even though national authorities are determined to curb the growth. The situation has become intense and Chief Cabinet Secretary Yoshihide Suga says the government is prepared to take immediate action in case of sharp exchange rate fluctuations. The weak yen has been a cornerstone of Prime Minister Shinzo Abe’s economic program. Nevertheless, the national currency is on the rise despite government measures. A yen rally does not bother the 75-year-old Sakakibara, who is currently a professor at Aoyama Gakuin University. The expert does not see a yen at 105 per dollar as a problem for Japan’s economy. Besides, Mr. Yen added that the government cannot influence the currency market a unilateral basis. Any currency intervention can only be done with an agreement from the United States and other counterparties.
Taking into account the correlation between the yen and S&P 500 movements, Washington is unlikely to stand out against an intervention in the market if it helps to stabilize the exchange rate and rule out a stock slump.
