The MUFG economists continue to consider that the most likely scenario is a drop in the USD/JPY.
Yen strength won’t be limited to the Fed
“The magnitude of this year’s budgeted easing (Fed funds future Dec 23 at 4.10%) leaves the dollar vulnerable and we are likely to see USD/JPY trading lower to year lows between 127- 128 relatively quickly.”
“Monthly Japan Trade data for February indicated that the reversal of this negative terms-of-trade shock is well underway in Japan. February’s fuel and mineral import bill amounted to 2,577,000 million The total import peak occurred in August, when natural gas prices peaked, with a total import bill of 3,423 billion yen.”
“Unsurprisingly, the Fed and falling US yields are garnering attention as a key factor driving USD/JPY lower, but the energy story will certainly add to the positive momentum in the JPY this anus.”
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.
