Thoughts on YEN's resilience into year-end

Watching $Y closely, particularly its resilience around the 847.79 level. With the current macro backdrop – lingering inflation concerns globally, but some signs of deceleration in core data – I'm assigning roughly 60% probability that the Yen remains above 845 by month-end. My reasoning is largely centered on the market's evolving read on the Fed. If we see any further hawkish rhetoric from the FOMC, even subtle, or if bond yields continue to show some upward pressure, the carry trade unwinding could be more gradual than some expect, providing a floor for the Yen. Conversely, a clear signal of an earlier Fed pivot would likely see that floor give way.

There's also the broader flight-to-safety dynamic that could come into play if any new geopolitical jitters emerge. The Yen still serves that role for many, albeit with reduced potency compared to previous cycles. So, while the immediate focus is on interest rate differentials, those background risks shouldn't be entirely discounted when thinking about its range-bound behavior.