GOLDILOCKS
Japan has now signaled that officials are on standby to intervene in the market to address the yen.
Gold is at record highs in Japan.
The Bank of Japan has distorted its capital markets, and the world will feel the effects.
Read: https://x.com/goldtelegraph_/status/1773887121268396146?s=46
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The Bank of Japan is in a very difficult position. They hold a lot of US dollars in reserve that could be utilized to prop up their own currency if they were to sell it off. The problem is that a move like this would disturb the balance of trade on a worldwide level. Shifts in the prices of other countries' currency values may start a domino effect.
A stronger Yen would create a lower US Dollar if too many sales of the US dollar were to be put into the market so quickly. Normally, lowering interest rates creates more purchasing power for a country, this is currently not working for their economy. Because of this reason, a currency intervention is being contemplated.
Normal banking protocols are currently not able to pull them out of their situation at this time.
They are Basel 3 compliant, and a move towards more reliance on gold as a Currency Reserve may be an option they cannot rule out at this point.
A clear backing and more gold support while selling off the dollar in small increments may be a choice that has validity at this time. Either way, the country needs to increase the value of their currency soon, and choices are becoming very limited quickly. CNBC Japan Times Financial Services Agency
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