JPY Undervalued Heading into Election

Crédit Agricole analysis highlights that the JPY is modestly undervalued ahead of the Japan election, while the GBP is facing downward pressure from a dovish Bank of England. The report also notes potential exhaustion in the SEK rally and persistent strength in the CHF.

Key Takeaways

• 1.The Japanese Yen (JPY) is currently seen as modestly undervalued by FAST FX models heading into the weekend's Lower House election.
• 2.The UK Pound (GBP) is under pressure following a dovish Bank of England (BoE) hold and downward revisions to growth and inflation forecasts.
• 3.Swedish Krona (SEK) rally shows signs of exhaustion after dovish Riksbank minutes suggested the possibility of future rate cuts despite previous guidance.

Table of Contents

• Asia overnight
• JPY: a bit undervalued heading into the election
• GBP: pounded by politics and policy
• CHF: reservations have not faded
• CAD: still a job report today
• SEK: deflated at last?
• Open trade recommendations
• Key events
• Red Mount Analytics
• Global Markets Research contact details
• Certification
• Valuation and methodology

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