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Robin Brooks, industry influencer, highlights that the yen is declining again as markets remain unconvinced by Japan's official FX intervention while the Bank of Japan continues to purchase JGBs to cap yields.
Brooks points out that such JGB buying increases depreciation pressure on the yen, making official intervention largely ineffective and giving traders better levels to sell the currency.
Brooks previously examined how Japan’s yen weakness is driven by high government debt and the Bank of Japan’s yield caps rather than currency policies, according to his earlier analysis. In separate market commentary, concerns over economic growth have raised recession risks in Europe. Both developments highlight persistent challenges across key currency and bond markets.