JPY reduces year’s losses – DBS
|Following the unwinding of carry trades, the Japanese Yen (JPY) has reduced this year’s losses to -2.8% ytd on Tuesday vs. -13% in early July, DBS Senior FX Strategist Philip Wee notes.
JPY stays positive
“On August 23, Japan’s parliament will hold a special session regarding the Bank of Japan’s monetary policy decisions on July 31. BOJ Governor Kazuo Ueda should stand by the plan to raise rates again if the median forecasts set out on July 31 are met or exceeded.”
“Ueda will unlikely expect the ‘Black Monday’ sell-off in early August to derail the upgrades to the BOJ’s economic and inflation forecasts announced on July 31.”
“The Nikkei 225 has recovered to around 38,000, or near the level at which it plunged to the 31,156 low on August 5. The 10Y yield differential between the US and Japanese bonds sees USD/JPY closer to 140 instead of 150.”
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