Former Japanese forex "boss": Yen may be undervalued by 20%, bears should still watch out for intervention risks.

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Jinse Finance reports that on July 6, Tatsuo Yamazaki, a former Japanese Finance Ministry finance official and former head of Japan’s foreign exchange policy, said in an interview on Monday that the yen should appreciate by up to 20% from current levels (to about 130 yen per $1), and he pushed back against views that the yen could weaken further. Yamazaki said: “This is no longer a fundamental issue, but a question of how market expectations shift. But we are approaching the climax.” He believes the current estimate that the yen is undervalued by 10% may be overly conservative. “If the yen rises to around 130, I wouldn’t be surprised. Honestly, that’s my view.” Meanwhile, Yamazaki hinted that the market should not mistake the recent apparent calm from Japanese authorities for complacency. He said: “They have already issued warnings, and anyone still holding yen short positions knows they face the risk of punishment for intervention—meaning being forced to close their positions. The Ministry of Finance has moved beyond the warning stage, and the authorities have shown they are willing to take action.”
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