JPY looks good when neutral. Overview for 29.11.2022

The Japanese yen against the US dollar cunningly avoids devaluation. The current quote is 138.67.

The weak US dollar helps the yen remain neutral. This is a big victory if we keep in mind that the main course of the yen is devaluation, connected to a huge difference in trends and interest rates of the US Federal Reserve System and the Bank of Japan.

Meanwhile, the domestic economic situation in Japan is becoming every day tougher.

For example, the BoJ reported negative balance of the treasury bonds portfolio it holds. The loss at the end of September amounted to about 874.9 billion yen (6.29 billion USD). Meanwhile, in March it was 4.373 trillion yen of profit.

The losses are directly connected to the growth of the treasury bond yield. Ten-year bonds in September were generating about 0.25% of profit. This is the high for the Bank of Japan.

In fact, this means that the monetary policy and the financial situation on the whole are in big trouble.