Deutsche Bank: Japan Has Two More Opportunities to Intervene in Yen According to IMF Rules

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On July 1, Deutsche Bank stated that according to International Monetary Fund (IMF) rules, if Japan wants to maintain its status as a freely traded currency, it can only intervene in the exchange rate two more times from now until November, with each intervention lasting no more than three consecutive trading days. "In other words, Japan's available resources are limited, and the market is aware of this," wrote strategist Michael Pfister in the report. Interventions must occur at times that can generate the maximum impact at the lowest possible cost. To minimize the operational costs for Japanese authorities, yen liquidity should also be at a low level when they intervene in the market. "Public holidays are particularly suitable for this, and fortunately, the U.S. will have a long weekend for Independence Day this week."
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