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USD/JPY: The pair flirts with 160 – Societe Generale

Meanwhile, the yen is in big trouble, notes Societe Generale FX strategist Kit Juckes.

USD/JPY trades near 160 once again

“At the beginning of May, 10-year bond yields were above 4.5% and USD/JPY was at 153, but here we are with yields down 25 basis points and USD/JPY rising near 160 again. Client warnings that with such large yield spreads, it is not the direction of those spreads that matters as much as their size, appear to be validated.”

“Value investors are scared away by carry traders and the only way to decisively scare them away may be for the Federal Reserve (Fed) to cut rates (probably more than once). The Bank of Japan (BoJ) faces a long summer and perhaps a long autumn too.”

Source: Fx Street

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