JPY has been the outperformer, surging against the USD. Analysts at MUFG Bank are a little wary though:
- Japanese politicians are nervous about the snail's pace of monetary policy normalization
- yen’s weakness, along with Japan's ruling Liberal Democratic Party leadership election in September are factors favouring a rate rise next week, not waiting until later
- MUFG expect a 15 basis-point rate rise
- “If the BOJ does not raise rates next week as we expect, the yen is likely to quickly [fall] back to recent lows putting pressure back on Japan to intervene again”
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The Bank of Japan meet on July 30 and 31.
USD/JPY update:
