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- USD/JPY: No reason for an idiosyncratic Yen recovery – Commerzbank
USD/JPY: No reason for an idiosyncratic Yen recovery – Commerzbank
The US inflation data weakened the Dollar, thus putting considerable pressure on USD/JPY. Ulrich Leuchtmann, Head of FX and Commodity Research at Commerzbank, analyzes the pair’s outlook.
Continued USD weakness is the only scenario suited to prevent continuously higher USD/JPY
Continued USD weakness is the only scenario suited to prevent continuously higher USD/JPY exchange rate. In view of BoJ policy, I see no reason for an idiosyncratic JPY recovery.
One thing is clear after all: if it is not its inflation projections it must be something else that is preventing the BoJ from a proper tightening of monetary policy. And I cannot really think of any other reason any longer but one very nasty and very JPY-negative one: that the BoJ has long since reached the conclusion that higher interest rates are simply impossible in view of the hopelessly over-indebted government.
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