From the FX Strategy desk at Credit Agricole CIB
The assumption that a Trump election victory would be viewed as increasing global risks and benefit safe haven currencies such as the yen was quickly dispelled. Instead, the focus has been on yield spreads, and the rise in US rates on the assumption of inflationary policy from the President-elect has supported the greenback (Chart 3). The BoJ is doing its part to let interest rate differentials move in favour of the US as well, recently undertaking its first operation to buy securities under its policy to target the yield curve.
CIBC “don’t expect USDJPY to move materially above the 110 threshold”
