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June 24, 2024
DM FX Outlook: Politics rears its head
June 24, 2024 7:42 AM UTC
· Bottom Line: The USD strength in Q2 on the back of a less dovish view of the Fed is unlikely to extend over the rest of the year. The JPY remains exceptionally cheap and has potential to recover sharply if risk appetite weakens. A slower JPY recovery is likely if lower inflation leads
March 25, 2024
DM FX Outlook: JPY weakness to reverse
March 25, 2024 12:21 PM UTC
· Bottom Line: Q1 has seen a generally seen a rangebound USD against riskier currencies, but JPY weakness has resumed in spite of a BoJ rate hike and narrowing yield spreads. This reflects continued positive risk sentiment in developed market equities, but we still expect JPY strength t
January 15, 2024
BoJ: The Pace of Exit
January 15, 2024 5:41 AM UTC
The BoJ has kicked the can down to the spring wage negotiation before another step in monetary policy. While current inflation forecast has exceeded BoJ's 2% target in all three items of headline, ex fresh food and ex fresh food & energy, the wage growth did not reach a "sustainable" level, which Ue
December 19, 2023
DM FX Outlook: 2024 - The Year of the Yen
December 19, 2023 9:06 AM UTC
Figure 1: Real effective exchange rates
Source: BIS
JPY weakness has been dramatic
The JPY has fallen more than 30% in real effective terms against other major currencies in the last 3 years, as a result of the rise in inflation seen in the U.S. and Europe and the consequent rise in interest rates in t