USD/JPY is back in the 150.00 range. Economists at CIBC Capital Markets analyze the pair’s outlook.
USD strength could lead to a mildly hawkish BoJ
Although we think ‘symbolic’ intervention will still occur around 152.00, Japanese officials know that in the long run, FX intervention becomes unsustainable. If the USD strength persists, we think there is risk the 152.00 level breaks.
BoJ officials have successfully convinced markets that any rate hike will be accompanied by a dovish message. The end of negative rates is in sight, and Japanese officials have noted that there has been progress made during the shunto wage talks.
In a bullish USD scenario, we think the topside in USD/JPY could rise to 155.00. In that event, the BoJ could move the rate hike forward to March, or even deploy a mildly more hawkish message in March/April to trigger a rebound back to 150.00.
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.