All of Japan's jawboning on the yen - and expectations the Bank of Japan (BOJ) will need to further ease policy - are unlikely to weaken the currency for long, JPMorgan Private Bank's Asia forex boss told CNBC.
Ben Sy, head of fixed income, foreign exchange and commodities for Asia at JPMorgan Private Bank, said Japanese companies and investors still had substantial offshore assets.
"When they see the yen weaken, they may use that as an opportunity to repatriate the earnings," Sy said - a move that would in turn likely cause the yen to strengthen.
Despite the Bank of Japan surprising markets on January 29 by introducing a negative interest rate policy, the yen has strengthened against the greenback, with the pair falling from levels over 120 in late January to as low as under 107, before recovering to trade around 110 early Monday.
That the yen strengthened despite the introduction of negative rates was "a big surprise to the market," Sy said. But he noted that the move was due to domestic buyers of the currency, particularly exporters, repatriating funds to Japan.
"They repatriated a lot of offshore earnings back to Japan. That results in strong buying of yen and that triggered short-covering of the yen positions," Sy said. "So the yen [went] from short to long, first driven by domestic and then followed by foreign investors."