Eurizon SLJ Capital, led by Stephen Jen (creator of the ‘dollar smile’ theory), believes the dollar has peaked against the yen after the joint US-Japan intervention. Both governments spent roughly $87 billion buying yen on July 30 and 31, their first coordinated purchase since 1998. The yen initially dropped from nearly 164 to 155.2 per dollar following the intervention but has since given back about half its gains, trading around 159.3. The firm forecasts the yen reaching 125 per dollar, a gain of more than 20% from current levels. However, US interest rates remain far above Japan’s, encouraging Japanese investors to keep placing funds abroad.
Source: Read the original article
