The dollar-yen’s sharp sell-off this week caught many investors off guard, but what underlies the dramatic declines and, more importantly, is there more pain in store?
“The burning question on everyone’s mind today is whether dollar-yen will continue to head lower,” Kathy Lien, managing director at BK Asset Management said in a research note published on Wednesday.
The yen strengthened 1.4 percent to 101.5 per dollar on Tuesday, after Bank of Japan (BOJ) chief Haruhiko Kuroda gave little hint of future easing at the conclusion of the central bank’s policy meeting. It was the largest intraday decline for the dollar against the yen in 8 months.
The dollar-yen recovered some of its losses in early Asian trading on Wednesday to trade around 101.9.