USD/JPY: Markets digest report of BoJ’s undeterred hawkishness – Scotiabank
The Japanese Yen (JPY) is strong, up 0.7% against the US Dollar (USD) and outperforming all of the G10 currencies as we head into Tuesday’s NA session, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

The Japanese Yen (JPY) is strong, up 0.7% against the US Dollar (USD) and outperforming all of the G10 currencies as we head into Tuesday’s NA session, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

JPY seems outperforming

"Renewed confidence in the BoJ’s intentions for policy tightening are driving the yen higher, with media reporting that policymakers are not deterred by the latest political uncertainty introduced by PM Ishiba’s upcoming resignation."

"The reporting suggested that the BoJ is likely to keep policy unchanged at its next meeting on September 19, shifting the focus to October and December for the resumption of rate hikes. Narrowed US-Japan yield spreads are offering the JPY fundamental support, and markets are pricing in 16bpts of tightening by year-end – up from 11bpts on Monday."

"We are medium-term USD/JPY bears and highlight the latest break below 50 day MA (147.42) support. We look to continued weakness toward the 142.00 level in the coming weeks."

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