Yen to Face a Lot of ‘Depreciation Pressure’_ Mizuho’s Cheung

The resilience that we see in the dollar continue to be one of the factors that will weigh on the yen, or is it really more as long as the Bank of Japan doesn't do anything extreme, in fact, may not do something more for some time yet after last week? Yeah, I think for the yen pair, they are really concerned about the depreciation level. I think 152 remains the key level to watch because a few years ago, we saw the authorities just try to do an invention to limit the downside for the Japanese yen. And at this moment, I think the risk is still quite large because if they run from this level, we may see some sharp depreciation pressure coming out for the dollar-yen pair, especially market are foreseeing such kind of monetary divergency between the Fed and BOJ will just continue until the year end. Even though the BOJ has raised its interest rate, the interest rate differential between the US and Japan remains quite large, and it's very favourable for the carry trade pair. So, technically, if it broke 150 level, I think there will be a trend of even further carry trade coming into long dollar-yen pair, and it will create a lot of depreciation pressure on this currency.