USD/JPY faces upward pressure toward 160 as Japan considers a JPY 3 trillion supplementary budget while the US Fed transitions to new leadership under Kevin Warsh. Despite slowing domestic inflation, BOJ hawkishness remains a key focus for markets ahead of the June meeting.
Key Takeaways
- 1.USD/JPY is expected to test the 160 level if Japanese fiscal concerns intensify and long-term yields continue to rise.
- 2.The Japanese government is considering a supplementary budget of approximately JPY 3 trillion, which has sparked concerns about fiscal deterioration.
- 3.US President Trump has moderated his calls for Fed rate cuts in response to rising inflation concerns, ahead of Kevin Warsh taking office as Fed Chair.
Table of Contents
- Week in review
- President Trump tones down calls for rate cuts
- Fiscal concerns in focus as supplementary budget considered
- Treasury Secretary Bessent urges BOJ rate hikes
- It all comes down to Governor Ueda
- Forecast range
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Authors
Teppei Ino
Securities
USDJPYJapan 10-year Government BondGBPUSD
Themes
Fiscal Deterioration ConcernsCentral Bank Leadership TransitionGeopolitical Inflation Risks
Regions
Asia PacificNorth AmericaEuropeJapanUnited StatesUnited Kingdom