Yen Lays Foundation for Rally Toward 100 per Dollar

The video discusses the dynamics of the Dollar Yen currency pair, highlighting its recent movements due to factors like dollar weakness and equity market fluctuations. It explores the breaks in correlation and the relative weakness of the yen, emphasizing the Bank of Japan's commitment to yield curve control. The discussion also covers the potential need for the Bank of Japan to adjust its policies in response to rising global yields, aiming to lift inflation expectations and achieve lower real yields, ultimately leading to a weaker yen.

What was a significant factor in the recent movement of the Dollar-Yen exchange rate?

• Rising US interest rates

• Increase in global oil prices

• Strengthening of the Euro

• Weakness in the equity markets

Why is the Yen expected to weaken relative to other currencies?

• Because of the Bank of Japan's yield curve control policy

• As a result of rising global oil prices

• Because of the strengthening of the US dollar

• Due to Japan's increasing trade deficit

What is the primary goal of the Bank of Japan's yield curve control policy?

• To increase the value of the Yen

• To lower inflation expectations

• To lift inflation expectations

• To stabilize the stock market

How might the Bank of Japan respond to rising global yields under its yield curve control policy?

• By buying more JGBs

• By reducing inflation expectations

• By selling more government bonds

• By increasing interest rates

What is a potential outcome of the Bank of Japan's yield curve control on real yields?

• Stabilization of real yields

• Decrease in real yields

• Increase in real yields

• No impact on real yields