The US dollar remains strong as market participants price in higher inflation risks and increased Fed rate hikes amid Middle East instability. Simultaneously, Japanese authorities are actively seeking to shift domestic savings toward JGBs.
Key Takeaways
- 1.The US dollar is gaining support from higher energy prices and expectations of more aggressive Fed rate hikes.
- 2.Middle East tensions, specifically US-Iran conflict regarding the Strait of Hormuz, are adding to inflation risk and energy supply concerns.
- 3.Japanese officials are verbally intervening to encourage domestic investors to allocate more capital toward JGBs and yen-denominated assets.
Table of Contents
- USD: Hawkish Fed comments & higher energy prices providing tailwind
- JGBs HAVE OUTPERFORMED SINCE LATE LAST WEEK
- JPY: Further verbal support indicating potential shift in domestic savings
- KEY RELEASES AND EVENTS
Document Preview
Access the Full Report
Get unlimited access to institutional research reports with a 14-day free trial.
Authors
Lee Hardman
Securities
Japanese Government BondsBrent CrudeUSD
Themes
Domestic asset repatriation in JapanGeopolitical instability in the Middle EastHawkish monetary policy
Regions
Middle EastUnited StatesJapanIran