14
NIby u/nicole26·1moQuestion

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

HUu/hugoschneider·1mo

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.

13
YPu/yan_p·1mo

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

5
OLu/olenastoica·1mo

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

4

More like this