Bloomberg carry the report saying that giant hedge fund Pimco is buying the yen, projecting that the Bank of Japan will be pressured into tightening monetary policy as inflation quickens.
more to come
Via the report (Bloomberg is gated, this in brief)
- Pimco started building a long yen position above 140 from a few months ago
Emmanuel Sharef, a Pimco fund manager said
- “As we continue to see inflation in Japan rising and being steadily above their target, they will want to move in the direction of abandoning or changing their yield-curve control policies and eventually there might be a need for a hike,”
- “Inflation in the US is coming down, and inflation in Japan is still elevated. Within our framework, that naturally creates a yen long.”
- “I can’t predict exactly what they’re going to do but the need is there to continue to tighten policy in some form,”
- “It could take the form of an additional easing step that’s more gradual. It could take the form of an abandonment of YCC and then eventually potentially a hike as well.”
