Financial Union News on October 24 (Editor Xiaoxiang): The yen to usd exchange rates fell to the lowest level in nearly three months on Wednesday, reigniting concerns that if the yen continues to depreciate, Japanese officials may intervene to support the yen.

Market data shows that the yen exchange rate plummeted by about 1.4% overnight, and the usd to yen once rose to 153.18, the highest level since the end of July. This recent intense rise has pushed the usd to yen above the 200-day moving average of 151.38, leading analysts to believe that it opens the door for further yen depreciation.

In the past three weeks, due to the continued cautious signals of gradual interest rate cuts by Fed officials, combined with the soaring probability of Trump's victory in the gambling market recently, the usd has been rising along with U.S. bond yields. The usd index has been a recognized investment option in the "Trump trade" for a long time.

Monex forex trader Helen Given said, "The yen has once again taken a dangerous path, especially considering the low likelihood of a rate hike by the Bank of Japan at the meeting next week. It is very likely that the usd to yen will move towards the 155 level by the end of this year."

So far this month, the yen exchange rate has fallen by about 6%, potentially marking the worst month since April 2022. Despite all G10 currencies against the usd experiencing declines this month, the yen still ranks at the forefront in terms of depreciation. This inevitably reminds many of the yen's several significant declines in recent years.

Yukio Ishizuki, senior forex strategist at Daiwa Securities in Tokyo, said that given the current momentum, the yen is likely to weaken further while the usd is expected to strengthen. If the yen continues to weaken, Japanese authorities are likely to intervene to suppress exchange rate fluctuations.

It is worth mentioning that Bank of Japan Governor Haruhiko Kuroda hinted at continuing to raise interest rates in the future while attending the IMF meeting in Washington on Wednesday, indicating that determining the appropriate scale and timing of further normalization of Japan's monetary policy is occupying his full attention.

"I am thinking about what the total scale of normalization in the future should be, and how to allocate rate hikes most reasonably in different time periods," said Kazuo Ueda on Wednesday at an event. "This makes me unable to sleep every day."

Nomura International believes that if the Japanese yen weakens further after this weekend's Japanese House of Representatives election, it will not only increase the possibility of government intervention, but also may prompt the Bank of Japan to hint at a potential rate hike as early as December at next week's policy meeting. Yusuke Miyairi, Nomura's currency strategist, said the yen currently seems to be acting as a regulating valve, alleviating all the pressures facing Japan's macro economy.

In terms of interest rate differentials, on Wednesday Japanese government bond prices fell along with US Treasury prices, with the 40-year JGB yield briefly rising to 2.535%, the highest since 2008. However, the recent increase in JGB yields appears to be not as significant as that of US Treasury yields.

Marito Ueda, Head of Market Research at SBI Liquidity Market Co., stated that until the impact of the US presidential election subsides, US Treasury yields are unlikely to decrease, and the US dollar is unlikely to face selling pressure.

Tom Fitzpatrick, Managing Director of Global Market Insights at R.J.O'Brien, wrote: "If you, like me, believe that US yields will continue to rise, it is hard not to agree with the upward trend of the US dollar against the Japanese yen."