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- USD/JPY: Rising wages and risks to the YCC program to keep focus to the downside in H2 – CIBC
USD/JPY: Rising wages and risks to the YCC program to keep focus to the downside in H2 – CIBC
Economists at CIBC Capital Markets discuss USD/JPY outlook.
Wages are the key
Although we remain biased towards USD/JPY downside, investors continue to wait on an obvious catalyst.
Rising corporate profitability provides scope to fund recently agreed-to high wage deals.
We expect rising wage dynamics to impact the BoJ CPI forecasts in the July policy report and for CPI forecast adjustments to be a catalyst for potential policy (YCC) tweaks. That should support 10-year spread compression and buttress our call for downside in USD/JPY in H2 and beyond.
USD/JPY – Q3 2023: 130 | Q4 2023: 127
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