In Japan, the life after the carry trade unwind seems to be slowly returning to normal... Figure 1.
Today is another day of the yen weakening against the dollar.
Interestingly, the BoJ was probably not entirely satisfied with what it really wanted to achieve, i.e. strengthening the yen, also at the expense of investors trying to weaken it further. See Figure 2, where I marked probable interventions by the BoJ trying to strengthen the yen, then it succeeded, but probably to a greater extent than expected... hence Shinichi Uchida's statement (August 7) that "BoJ won't hike interest rates when markets are unstable."
But what may be one of the main root causes for the strong yen... are upcoming rate cuts in the US.
In 2022, the yen began to weaken sharply 12 days before the Fed's first rate hike - see Figure 3.
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