Yen will struggle to trade on the strong side until USD rates move lower – ING
|The Japanese Yen (JPY) is struggling to trade higher. Economists at ING analyze Yen’s outlook.
The Yen needs a dovish Fed more than a hawkish BoJ
We have stressed multiple times how a sustainable rally in the Yen relied more on a decline in US rates than a BoJ rate hike. We may be observing the symptoms of this dynamic particularly well now, with the jump in Treasury yields on Thursday reasonably discouraging long-JPY positions. This is not just obvious in USD/JPY, but also in other crosses like EUR/JPY, which is still trading around 161.50.
We remain of the view that the Yen will struggle to trade on the strong side outside of volatility around a rate hike until USD rates move lower (which remains our base case for later this year).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.