He USD/JPY has been the surprise of this week, retreating to the 155/156 area seen in early June, suggesting Francesco Pesole, FX Strategist at ING.
Undervalued yen puts pressure on US manufacturing sector
“Lower short-term rates in the US have clearly been a big driver of the move, but politics have also played a role here. Donald Trump’s interview with Bloomberg highlighted the undervalued Yen (JPY) putting pressure on the US manufacturing sector.”
“And in Tokyo, political calls are getting louder, signaling that a weak Yen has passed its sell-by date. Investors who are short the Yen for the carry trade also have to contend with more opportunistic interventions in the Japanese currency market.”
“Ultimately, we think the US macro/rates story will dominate and should drive USD/JPY lower later this year. We currently have a year-end forecast of 153 here.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
