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الاقتصادية
Japanese yen gains amid changing financing landscape
The article discusses the improvement in the Japanese yen's performance, which increased by about 2% against the dollar over the week until September 4th. This marks the strongest weekly performance since the joint intervention by the US and Japan in the foreign exchange market in July. This positive movement is attributed to expectations that the Bank of Japan will raise interest rates by 25 basis points in September, along with rising Japanese bond yields and potential interventions by authorities to support the currency. The yen's weakness over the years was driven by a significant interest rate differential between Japan and the US, encouraging investors to borrow in yen and finance overseas investments through carry trade transactions. However, this attractiveness has diminished as Japanese interest rates and returns have increased. Changes in interest rates and the rising value of the yen pose risks to capital flows, as investors may sell their foreign assets and repatriate funds into yen, potentially exerting downward pressure on global financial markets, particularly stocks and bonds. Although the yen has again fallen to around 156 yen per dollar, the market faces simultaneous risks of interest rate hikes, government intervention, and changing capital flows. This complexity complicates the investment environment and makes betting on yen weakness more costly and risky.
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