The JPY Monthly explores the battle to keep USD/JPY below 160 amid looming BOJ rate hikes and the potential reopening of the Strait of Hormuz. While the BOJ may hike in June, real-demand yen selling for energy imports remains a significant headwinds.
Key Takeaways
- 1.The USD/JPY faces strong psychological resistance and potential intervention risk at the 160.00 level.
- 2.The reopening of the Strait of Hormuz is expected to be a yen-negative factor due to increased real-demand yen selling for energy imports.
- 3.The Bank of Japan is likely to raise interest rates at its June 15-16 meeting to combat inflation driven by higher import prices.
Table of Contents
- Summary
- May in review
- Is the Middle East situation finally entering the endgame?
- Unwinding of safe-haven dollar buying likely to be limited
- Securing price stability after a Middle East peace deal
- Intervention concerns remain
- Reopening the Strait of Hormuz would be a yen-negative factor
- BOJ set to reconsider rate hike in June
- What Governor Ueda does not say will be key
- Warsh-led FOMC likely to remain on hold
- President Trump holds off on calls for rate cuts
- Rate hikes are being rewarded in FX markets
- QUARTERLY FORECAST RANGE AND PERIOD-END FORECAST
- Legal Entities and Branches
- GENERAL DISCLAIMERS
- COUNTRY AND REGION SPECIFIC DISCLAIMERS
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Authors
Teppei Ino
Securities
USDJPYCrude OilDXY
Themes
Geopolitical De-escalation and Trade FlowsCentral Bank Policy Normalization Divergence
Regions
Asia PacificMiddle EastNorth AmericaJapanUnited StatesIran