Tag Archives: yen dollar exchange rate

Limited upside for the dollar against the yen, but significant downside will take time.While widening interest rate differentials are supportive of the US dollar against the yen, if rates rise too far and too fast, they can help the yen against the dollar, as recent financial market volatility has shown. In October, the Japanese yen appreciated by 1.9% against the dollar and outperformed all other major currencies.Coupled with extreme fundamental yen undervaluation, the potential for the...

Our 2018 scenario of a deceleration in US economic activity and a slightly less accommodative Bank of Japan should weigh on the dollar versus the yen.From 6 November to 28 November, the Japanese yen gained 2% against the US dollar, outperforming all G10 currencies but the euro.In our view, the key driver of the USD/JPY rate is the 10-year real rate differential, especially since the introduction of the yield-curve-control (YCC) framework by the Bank of Japan (BoJ) on 21 September 2016.In...