--- title: "Invesco comments on the US-Japan joint intervention in the foreign exchange market: expects Japan to raise interest rates earlier, maintaining the forecast for the USD/JPY exchange rate to remain in the range of 150 to 155 by the end of the year" type: "News" locale: "en" url: "https://longbridge.com/en/news/294973580.md" description: "Invesco strategist Tomonobu Kinoshita commented on the US-Japan joint intervention in the foreign exchange market, expecting the Bank of Japan to advance its interest rate hike from December to October, while maintaining the judgment that the possibility of further interest rate hikes by the Federal Reserve this year is low. He believes that Japan's continued interest rate hikes will narrow the interest rate differential and support the yen, thus maintaining the forecast for the USD/JPY exchange rate to be in the range of 150-155 by the end of the year" datetime: "2026-08-05T13:16:03.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/294973580.md) - [en](https://longbridge.com/en/news/294973580.md) - [zh-HK](https://longbridge.com/zh-HK/news/294973580.md) --- # Invesco comments on the US-Japan joint intervention in the foreign exchange market: expects Japan to raise interest rates earlier, maintaining the forecast for the USD/JPY exchange rate to remain in the range of 150 to 155 by the end of the year The Zhitong Finance APP learned that the Japanese Ministry of Finance confirmed that Japan and the U.S. authorities jointly purchased yen on July 31 to intervene in the foreign exchange market. This is the first joint intervention in the yen market by the two countries since the 2011 Great East Japan Earthquake, marking 15 years. Tomo Kinoshita, a global market strategist at Invesco Asset Management (Japan) Co., Ltd., commented on the U.S.-Japan joint intervention in the foreign exchange market, **expecting that the timing of the next interest rate hike by the Bank of Japan will be advanced from the previously predicted December to October**, while still believing that the likelihood of further interest rate hikes by the Federal Reserve this year is low. If this judgment is correct, the continued interest rate hikes by the Bank of Japan will help narrow the interest rate differential between the U.S. and Japan, providing support for the yen. Therefore, **the forecast for the USD/JPY exchange rate at the end of 2026 remains in the range of 150 to 155**. As of the end of July, the USD/JPY exchange rate once approached the 164 level. Japanese authorities may be concerned that the depreciation of the yen will accelerate inflation, while U.S. authorities may worry that a strong dollar will weaken U.S. export competitiveness, and turmoil in the Japanese financial market (such as rising yields on Japanese government bonds) may further push up U.S. long-term government bond yields. Currently, U.S. and Japanese authorities are strengthening cooperation to address the issue of a weak yen. At the monetary policy meeting on July 30-31, the Bank of Japan released signals that were more hawkish than before. In the latest "Economic and Price Outlook Report," the Bank of Japan emphasized that core inflation may exceed its 2% target level and negatively impact economic activity. Additionally, Bank of Japan Governor Kazuo Ueda stated at a post-meeting press conference that "the pace of interest rate hikes may accelerate," suggesting that the central bank may no longer maintain the rhythm of hiking rates approximately every six months, but may adopt a faster pace. These statements are believed to further strengthen the effectiveness of this round of foreign exchange market intervention. The Bank of Japan has historically raised policy rates gradually, not only to assess whether each rate hike would bring unexpected consequences but also due to political pressure from the government to maintain an accommodative monetary policy. However, the U.S. government's willingness to participate in joint intervention this time reflects its concerns about the depreciation of the yen and also indicates that it may welcome a more aggressive tightening policy stance from the Bank of Japan. **If the Japanese government's constraints on the central bank's interest rate hikes are weakened due to U.S. influence, the environment for the Bank of Japan to tighten policies in the future may become more favorable**. Based on the latest developments, the expectation is that the timing of the next interest rate hike by the Bank of Japan will be advanced from the previously predicted December to October. **The financial market is also gradually digesting the possibility of an earlier interest rate hike by the central bank, which seems to be bringing some appreciation pressure on the yen.** Invesco mentioned that the latest round of joint intervention by the U.S. and Japan has had a significant impact on the exchange rate. There is still a divergence in the market regarding whether the effects of the intervention are fleeting or can last for a period of time. He believes that **the potential for further intervention by the two governments will continue to alleviate the selling pressure on the yen in the short term.** Before this intervention action, the financial market had accumulated a large amount of speculative short positions on the yen. If the market increasingly fears that the U.S. and Japan will join forces to intervene again, these positions may be forced to close, further driving up the value of the yen. Looking back at past experiences, Japan's buying of yen to intervene in the foreign exchange market has had inconsistent effects on market positions. In July 2024, when the Japanese Ministry of Finance entered the market to support the yen, market expectations for a rate cut by the Federal Reserve were heating up Against this backdrop, the speculative positions in yen futures at the Chicago Mercantile Exchange (CME) shifted from a significant net short position to a net long position. Subsequently, in conjunction with the Federal Reserve's interest rate cut in September of the same year, the yen rose from over 160 yen per dollar in early July to nearly 140 yen by mid-September ### Related Stocks - [CME.US](https://longbridge.com/en/quote/CME.US.md) ## Related News & Research - [ROI-US-Japan action undercuts G7's historic FX role: Mike Dolan](https://longbridge.com/en/news/295061289.md) - [Dangote has 'strong intent' for South Africa listing after Nigeria IPO - JSE](https://longbridge.com/en/news/294995220.md) - [Shooting Star Acquisition Corp. 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