A 1,000 yen bill on a tray at a souvenir shop in Hakone, Japan, Tuesday, November 22, 2022.
SeongJoon Cho | Bloomberg | Getty Images
Among the major central banks, the Bank of Japan is best known for its ultra-accommodative monetary policy, but this must end soon to support the country’s currency, according to Deutsche Bank.
“For the yen to improve significantly, there really needs to be a more dovish pivot from all other central banks, otherwise the Bank of Japan really needs to start moving away from quantitative easing and negative rates,” Tim Baker, FX G10 strategist at Deutsche Bank. told CNBC’s Street Signs Asia.
Quantitative easing is when a central bank attempts to increase the liquidity of its financial system by purchasing long-term government bonds from the country’s largest banks.
THE yenwhich last traded at 148.98 against the dollarwill reach a 33-year low against the greenback if it weakens below 151.94.
The BoJ has used various quantitative easing tools to revive the economy over the past three decades.
“There is so much QE they (the BOJ) are doing now, more than the Fed and ECB ever did. But the BOJ has been behind inflation, it needs to continue to improve its numbers , she continues to be surprised. “going a little too slow,” Baker added.