Photo: justindoub via flickr
In the aftermath of that massive yen surge, a lot of folks have been wondering, what’s up with the Bank of Japan? Isn’t the yen at the point where they’re supposed to be intervening, and buying dollars?A trader suggests to us that it’s the wrong way to think about it.
The typical case for weakening the yen has to do with keeping the margins of exporters alive. But are exporter margins the big issue right now? It would seem that Japan’s bigger interest right now is in getting imports cheaper. Japan is going to need to import a lot, especially on the energy front in the wake of this crisis. A strong yen aids that effort significantly. Traders waiting for that BoJ intervention may have to wait a while.
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