USD/JPY to see another spike above 150 if BoJ keeps cap on 10Y JGB yield unchanged – SocGen

Equipment Juckes, Chief World FX Strategist at Société Générale, analyzes USD/JPY outlook outdated to Tuesday’s Bank of Japan meeting.

Apprehension-evening for BoJ-watchers

The BoOJ obtained’t hike charges, but we glance a 50% likelihood that the de-facto cap on the ten-year JGB yield will upward thrust from 1% to 1.5%.

USD/JPY continues to trace yield differentials, so it’s no longer easy to glance how we would possibly be in a position to effect far off from a response one ability or different from the resolution on Tuesday.

Within the occasion that they retain the cap unchanged, we would possibly be in a position to presumably glance one more spike above USD/JPY 150 and more intervention focus on.

Within the occasion that they elevate the cap, every 10 bps JGB yields upward thrust relative to Treasuries can budge USD/JPY down by about 2%, and take EUR/JPY down by as mighty or more.

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