Japan Backs Faster Rate Hikes, Dashing USD/JPY Bounce
The Japanese Yen has been trading just below the psychological resistance level of 160.00 against the US Dollar, according to Brown Brothers Harriman's (BBH) Elias Haddad.
This comes as Japan's government signals support for faster Bank of Japan (BoJ) rate hikes, which is expected to reinforce the narrowing US, Japan differentials and a lower USD/JPY case.
Haddad argues that the narrative that BoJ must tighten aggressively to strengthen the Japanese Yen is misleading, citing fiscal risk and intervention risks as key factors in future alignment.