The Japanese Yen (JPY) is up a marginal 0.1% in opposition to the US Greenback (USD) as market contributors mood their response to the announcement of a US/Japan commerce settlement amid uncertainty surrounding PM Ishiba’s political future, Scotiabank’s Chief FX Strategists Shaun Osborne and Eric Theoret report.
Yield spreads provide help
“Rumors of the prime minister’s resignation have since been denied however the threat looms massive for market contributors within the aftermath of this weekend’s higher home election. The US will impose a 15% tariff on US imports from Japan, and Japan is alleged to have relaxed its security necessities with a purpose to enable extra US car imports.”
“Basically, yield spreads narrowing significantly in response to a surge in Japanese yields, reflecting market expectations for renewed hawkishness from an emboldened BoJ. The BoJ had paused its tightening cycle in response to commerce and election uncertainty and is now free to hold on with normalization.”
“For USD/JPY, we glance to a continued decline towards the decrease finish of the current 142-148.50 vary.”
