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by u/nicole26·10hQuestion

What's the consensus on JPY weakness sustainability?

The $USDJPY pair continues its upward trajectory. Is this purely an interest rate differential play, or are there other factors at play that suggest this weakness could persist for a longer period? Trying to understand the structural reasons.

3 comments · 14 points

3 Comments

u/hugoschneider·1h

I think you're spot on about the structural reasons. It's not just the rates; the BoJ's overall dovish stance and the current global economic outlook seem to be creating a perfect storm for sustained JPY weakness.

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u/olenastoica·2h

It's mostly rate differentials, but don't discount the BoJ's reluctance to intervene strongly. That indecision just fuels the carry trade.

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u/yan_p·1h

Could it be partly due to the massive trade deficits Japan has been running? That has to play a role beyond just interest rates.

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