The Japanese yen may be undervalued by 20%.

CoinWorld news: Tatsuo Yamazaki, who previously served as a Japanese official responsible for foreign exchange policy, said in an interview on Monday that the yen should appreciate by up to 20% (to around 130 yen per $1) from its current level, rebutting views that the yen could weaken further. Yamazaki said, “This is no longer a matter of fundamentals; it’s a matter of how market expectations will change. But we’re approaching a climax.” He believes the current estimate that the yen is undervalued by 10% may be too conservative. “If the yen rises to around 130, I wouldn’t be surprised. To be honest, that’s my view.”

At the same time, Yamazaki hinted that the market should not mistake the recent apparent calm from Japan’s authorities for complacency. He said, “They have already issued warnings, and anyone still holding yen short positions knows that they face the risk of punishment from intervention—namely, being forced to close out positions. The Ministry of Finance has moved beyond the warning stage, and the authorities have indicated they are willing to take action.”