Economist: High oil prices may keep the yen persistently weak, intervention effects could be limited

Golden Ten Data reported on April 27 that Kei Fujimoto, an economist at Sumitomo Mitsui Trust Asset Management, stated that regardless of how the situation in the Middle East develops, the yen may remain weak. He said: "Even if tensions with Iran ease, oil prices may stay high due to ongoing supply constraints. Concerns over worsening fiscal conditions and a deteriorating trade balance are expected to persist, making it difficult for the yen to appreciate in the short term." He also pointed out that, given the current yen weakness is driven more by economic fundamentals than by speculative factors, the effectiveness of foreign exchange intervention may be limited.