The US inflation data weakened the Dollar, thus putting considerable pressure on USD/JPY. Ulrich Leuchtmann, Head of FX and Commodity Research at Commerzbank, analyzes the pair’s outlook.
Continued USD weakness is the only scenario suited to prevent continuously higher USD/JPY
Continued USD weakness is the only scenario suited to prevent continuously higher USD/JPY exchange rate. In view of BoJ policy, I see no reason for an idiosyncratic JPY recovery.
One thing is clear after all: if it is not its inflation projections it must be something else that is preventing the BoJ from a proper tightening of monetary policy. And I cannot really think of any other reason any longer but one very nasty and very JPY-negative one: that the BoJ has long since reached the conclusion that higher interest rates are simply impossible in view of the hopelessly over-indebted government.
Disclaimer: The content above represents only the views of the author or guest. It does not represent any views or positions of FOLLOWME and does not mean that FOLLOWME agrees with its statement or description, nor does it constitute any investment advice. For all actions taken by visitors based on information provided by the FOLLOWME community, the community does not assume any form of liability unless otherwise expressly promised in writing.
Hot
No comment on record. Start new comment.