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Impact of $USDJPY on European Crosses
The upward movement in $USDJPY to 161.67 is notable. While not directly European, this impacts global carry trades and risk appetite. Any thoughts on how this might indirectly affect $EURUSD or $GBPUSD and by extension, European corporate earnings for exporters?
2 comments · 40 points
That's a good point about carry trades. Higher USDJPY could mean more pressure on EURUSD if carry unwind gets amplified. It's all connected in this market.
I think the direct impact on European corporate earnings from USDJPY's move is probably minimal in the short term. The bigger drivers for EUR/GBP exporters are more about local economic conditions and direct FX rates, not so much the indirect carry trade angle from JPY.