While global central banks are moving to tighten policy, the Bank of Japan (BoJ) remains in almost splendid isolation. In the view of economists at CIBC Capital Markets, 10-year UST-JGB spreads risk testing 300bps – which should allow USD/JPY to test the 135.15 high prior to any JPY reversal.
“BoJ Governor Kuroda continues to suggest that a weak JPY is an overall positive for the economy. That suggests that in the absence of a material MoF pushback, which is only likely if markets risk becoming disorderly, we expect the path of UST-JGB spreads to remain the primary determinant of USD/JPY.”
“As 10-year UST-JGB spreads risk testing towards 300bps, this supports the notion of the 2002 USD/JPY high at 135.15 being tested prior to any JPY reversal.”
© 2000-2022. All rights reserved.
This site is managed by Teletrade D.J. Limited 20599 IBC 2012 (First Floor, First St. Vincent Bank Ltd Building, James Street, Kingstown, St. Vincent and the Grenadines).
The information on this website is for informational purposes only and does not constitute any investment advice.
Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.
Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.
Please contact our PR department if you have any questions or need assistance at email@example.com.