- Analytics
- News and Tools
- Market News
- USD/JPY: The Yen will surely rally once rates start to re-converge – SocGen
USD/JPY: The Yen will surely rally once rates start to re-converge – SocGen
USD/JPY has spent the last 18 months tracking US-Japanese yield differentials with impressive consistency. Economists at Société Générale analyze the pair’s outlook.
The Yen has not been this cheap since the 1970s
Our rates strategists expect the US 5y yield to fall to 2.66% by this time next year, which would suggest USD/JPY would break below 130 if JGB yields stay at current levels and reach 125 if there were one further small adjustment to the band.
Correlations are there to be broken, but the current level of USD/JPY bears little relation to the performance of the economy, and in real effective terms, the yen is cheaper today relative to the USD than it has been at any point since the 1970s. Bigger mispricing can last longer than we ever used to think, but this one is extraordinary, and once rates start to re-converge, the Yen will surely rally.
© 2000-2024. All rights reserved.
This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).
The information on this website is for informational purposes only and does not constitute any investment advice.
The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.
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 pr@teletrade.global.
Bank transfers
