USD/JPY: Global spreads versus Japan favours yen weakness – MUFG
|It has just been confirmed that Fumio Kishida has won the LDP leadership election effectively confirming him as Japan’s next PM. He is considered a moderate and has experience in various positions. The yen is set to shrug off the new Japanese leadership and continue to weaken due to rising US bond yields
Kishida confirmed as Japan’s next PM
“A Kishida victory was the scenario that would mean the least potential for JPY reaction given he is seen as the candidate least likely to instigate any dramatic near-term changes in policy.”
“This Kishida victory should see the emphasis on policy continuity which should limit JPY volatility, but doubts over policy continuity could emerge over time that might help lift JPY.”
“It goes without saying that what is happening with UST bond yields and global yields matter more for near-term JPY direction – which is currently supportive of JPY weakness.”
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