Foreign Currency

Societe Generale forecasts USD/JPY under 140 in Q2 of 2024


Key Insights:

1. BoJ Meeting Outcomes:

The BoJ maintained its current policies but indicated positive prospects for wages and inflation, along with concerns about the side-effects of negative rates and yield curve control, suggesting possible policy changes by mid-2024.

2. Market Reactions:

The market remains skeptical about BOJ policy change, but the yen is supported by a calmer U.S. bond market and China’s potential equity market support plan, financed through repatriation of foreign currency holdings.

3. Yuan and Other Currencies:

The Chinese yuan, Australian dollar, and South Korean won have risen slightly more than the yen in response to these developments.

4. USD/JPY Projections:

Based on yield forecasts, SocGen contends that USD/JPY should currently be closer to 140 than 150 and is likely to fall below 140 in the second quarter of 2024, ending the year around 135.

This
summary is via the folks at eFX.

For
bank trade ideas, check
out eFX Plus
.



Source link

Leave a Response