MNI BRIEF: EU Ministers Could Discuss Defence Spending Monday

RPT- MNI INTERVIEW: Canada Chilled By Trump Tariff Threat

MNI China Daily Summary: Monday, January 20

MNI BRIEF: China Steel Industry To Control Capacity Further

MNI BRIEF: China, US To Strengthen Trade Dialogue - Official

MNI: China CFETS Yuan Index Down 0.05% In Week of Jan 17

MNI: EURZONE NOV CONSTRUCTION PRODUCTION 1.2% M/M

MNI: EUROZONE NOV CONSTRUCTION OUTPUT +1.2% M/M, +1.4% Y/Y

MNI: GERMANY DEC PRODUCER PRICES -0.1% M/M, 0.8% Y/Y

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

© 1982-2025 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

FOREX: CIBC Forecasting Just One BOJ Rate Hike in 2025, Recommend Long USDJPY

FOREX
BulletMarketsForeign Exchange Bullets
  • CIBC are expecting the BOJ to hike this week, however, given most of the move is already priced in, they believe a hike would have minimal impact. Furthermore, CIBC expect the tone of the meeting will be dovish, which would dampen market enthusiasm of pricing in more hikes to come and they only expect the BoJ to deliver one hike this year.
  • With this said, and counter to intuition, CIBC like positioning for USD/JPY appreciation ahead of the hike, and have recommended a tactical long at 156.00, with a target of 159.50 and a stop at 154.00
  • Bolstering the trade, CIBC highlight that the Fed is more open to pausing, and with the US data not weak enough to warrant immediate cuts, a slower-than-anticipated pace for the Fed should dispel (or at least limit) any anticipation of rapid central bank divergence between US and Japan.
  • Additionally, still attractive carry and a lower correlation to deteriorating risk sentiment should be supportive of the trade.
160 words

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
  • CIBC are expecting the BOJ to hike this week, however, given most of the move is already priced in, they believe a hike would have minimal impact. Furthermore, CIBC expect the tone of the meeting will be dovish, which would dampen market enthusiasm of pricing in more hikes to come and they only expect the BoJ to deliver one hike this year.
  • With this said, and counter to intuition, CIBC like positioning for USD/JPY appreciation ahead of the hike, and have recommended a tactical long at 156.00, with a target of 159.50 and a stop at 154.00
  • Bolstering the trade, CIBC highlight that the Fed is more open to pausing, and with the US data not weak enough to warrant immediate cuts, a slower-than-anticipated pace for the Fed should dispel (or at least limit) any anticipation of rapid central bank divergence between US and Japan.
  • Additionally, still attractive carry and a lower correlation to deteriorating risk sentiment should be supportive of the trade.