Published: 2024-12-24T10:05:02.000Z
USD/JPY flows: Trump and the JPY
Director of Research , Macroeconomics and Strategy
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Hedge funds are gearing up for 160 or 165 on USD/JPY in Q1 2025, with the BOJ delaying tightening and the USD mood positive.
However, President elect Trump could cause some volatility for JPY bears. Trump favors a lower USD and intermittently is likely to jawbone the USD lower and above 160 could agree to joint US/Japan FX intervention if Japan requested it. Additionally, though Japan is low down on Trump list, Japan defence spending build up is too low and Japan could come under pressure to significantly boost defence spending. Bias is still for USD to test higher into the new year, but USDJPY could be prone to pullbacks.