The yen has weakened back to the 160 level against the dollar as rising US yields and Middle East conflict risks outweigh recent Japanese government interventions. Markets are now focusing on potential rate hikes from the BoJ in June and the BoE in July to support their respective currencies.
Key Takeaways
- 1.USD/JPY has returned to the 160.00 level despite massive intervention by the MoF/BoJ, driven by rising US yields and Middle East conflict.
- 2.BoJ Governor Ueda is expected to signal a rate hike for the June 16 meeting, with market probability currently exceeding 80%.
- 3.The Bank of England is unlikely to hike in June but a move on July 30 is becoming more probable as MPC hawks emphasize inflation risks from energy shocks.
Table of Contents
- JPY: Ueda to signal a hike as broad support builds
- GBP: MPC divisions to persist as market rates do the work
- KEY RELEASES AND EVENTS
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Authors
Derek Halpenny
Securities
USDJPY2-year US TreasuryCrude Oil10-year JGB
Themes
Central Bank Policy DivergenceGeopolitical Energy Risk
Regions
Asia PacificUKNorth AmericaJapanUnited KingdomUnited States