May 13, 2022 - 03:55 PM 271 views
Currently, all the global central banks are on the verge of tightening their monetary policies except the Bank of Japan (BoJ), which is held in splendid isolation. According to CIBC capital markets economists, the 10-year old UST-JGB spreads are testing the threats at 300 basis points (bps), allowing the USD/JPY pair to test at 135.15 points ahead of the JPY reversal.
JPY to be weighed down by ultra-easy BoJ policy
Bank of Japan (BoJ) Governor Kuroda keeps on suggesting that having a weak JPY is an optimistic factor for the economy. This suggests that in the absence of a material (MoF) pushback, the market threats become untidy. As a result, we anticipate that the path for the UST-JGB spread will be the primary determining factor for the USD/JPY pair.
The 10-year old USD/JGB spreads test the risks at 300 basis points (bps). It holds up the concept of the 2022 USD/JPY pair, which is tested at 135.15 points ahead of the JPY reversal.