UBS: If oil supply continues to be hindered, the yen may depreciate against the dollar to 175 by the end of the year.

UBS strategist stated that even if Japanese officials increase verbal intervention, the yen's decline is expected to continue, and if oil supply continues to be disrupted, the yen may depreciate against the US dollar to the 175 level by the end of the year. Strategists like Shahab Jalinoos pointed out in a report released on Wednesday that if oil prices rise to $150 per barrel, "intervening in the exchange rate to suppress inflation may actually provide the market with an opportunity to sell the yen high, ultimately depleting foreign exchange reserves, but may not necessarily change the trend of yen depreciation." They added that suppressing inflation or relying more on fiscal measures, such as energy subsidies, could be more effective. In this scenario, the market may conclude that in a global stagflation environment, Japanese policymakers are not trying to prevent the depreciation of the yen, and the corresponding impact will push the USD/JPY significantly higher.