French Societe Generale Bank believes that the current situation of intervention in the yen is "quite attractive" and favorable.

French bank Societe Generale said that there is a "strong intervention background" currently, which makes the Japanese government more likely to successfully prevent the depreciation of the yen than usual. "The reason for the intervention is clear: year-end market liquidity shortages provide an opportunity, and market participants are busy finding reasons for the current unsustainable price levels, indicating a higher likelihood of successful intervention than usual," wrote Kit Juckes, global head of G-10 foreign exchange strategy at the French bank, in a report. Juckes pointed out that long-term interest rate differentials and volatility indicators suggest that the euro/yen and dollar/yen exchange rates should have peaked by the end of 2023; however, both pairs have continued to climb, with the euro/yen reaching a record high near 184 and the dollar/yen hovering in the 162 range. Juckes believes that intervention should curb the upward momentum of the dollar/yen and euro/yen, but added that, given the general weakness of Asian currencies, a significant reversal in the weakening trend of the yen is "unlikely," while concerns about weak economic growth and an aging population will continue to ferment.