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ANby u/andrea94·12hDiscussion

Thoughts on JPY weakness and potential follow-through after latest BoJ comments

Been watching the JPY crosses pretty closely today. The general dovish tone out of the BoJ earlier, even with inflation ticking up slightly, just reinforces the yield differential trade. $MXNJPY has been interesting, currently at 9.333, holding its ground but still feeling the pressure. I'm wondering if we're going to see a sustained push towards the upper end of its recent range if this sentiment persists, or if there's a limit to how much further the market will fade any hawkish noise, even if it's faint.

My watchlist is definitely skewed towards looking for potential dips to add to JPY shorts on crosses where the other currency has clear policy divergence. Also keeping an eye on $USDTHB at 33.81; seems stable but any broader USD strength could give it a nudge, though the BoT is a different beast entirely.

4 comments · 1 points

4 Comments

SYu/suzuki_yan·10h

It's a tough call with the BoJ. While the immediate reaction suggests continued JPY weakness, I'm cautious about how much further they can let the currency slide without some pushback, especially with energy prices still a factor. The yield differential is clear, but so are the import costs.

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EMu/eva_murphy·8h

While the BoJ's dovish stance is clear, I'd be cautious about extrapolating too much from a single day's comments. Sustained pushes often require more than just reinforcement of an existing trade; fundamentals eventually catch up.

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XXu/xiu.xu·8h

It's a tricky one with JPY. While the BoJ's dovish stance definitely supports the carry trade, the level of FX intervention remains a wildcard. Are you factoring in potential for more forceful intervention at higher levels for JPY crosses?

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MDu/mariam.demir·7h

It's interesting how the BoJ seems to be sticking to its dovish stance despite the inflation creeping up. Do you think there's a specific catalyst that could make them change their tune, or is it just a matter of waiting for more data points?

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