I’m just reading a report from a major bank outlining some pretty strong reasons why the SNB will not intervene.
- The Swiss export industry has not been decimated by the strong CHF as traditional markets in the US and Europe have been replaced by Asian markets, whose currencies are also strengthening.
- The large CHF38 billion in FX losses will make it pretty difficult for the SNB to justify any further FX market intervention.
- Any type of capital controls are also considered unlikely as they would adversely affect the very strong financial services industry
The first two reasons can probably be also made for the BOJ not to intervene.
