MNI BRIEF: Trade War To Increase Volatility Inflation -Panetta

MNI China Daily Summary: Friday, November 15

MNI BRIEF:China Optimistic On Property Despite Investment Fall

CORRECTED-MNI INTERVIEW: NBH To Hold Rates

MNI BRIEF: China Oct Retail Sales Surge On Holiday, Trade-ins

CHINA OCT INDUSTRIAL OUTPUT +5.3% Y/Y VS MEDIAN +5.5% Y/Y: NBS

EZ/UK Bond Supply Calendar: EU Synd; SK, BE Auction on Monday

MNI: US SEP BUSINESS INVENTORIES +0.1%; SALES +0.3%

MNI: US OCT INDUSTRIAL PROD -0.3%; CAP UTIL 77.1%

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

MNI EXCLUSIVE: German Turmoil Dashes EU's Joint-Funding Hopes -Officials

FED: Powell's Time Looks Up, Replacement Could Be Less Willing To Cut Rates?

© 1982-2024 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

Deutsche Bank Believe Today’s JPY Move is Warranted

JAPAN
  • Deutsche Bank think today’s JPY move is warranted and that this finally marks the day where the market realizes that Japan is following a policy of benign neglect for its currency. DB have long argued that FX intervention is not credible and the toning down of verbal jawboning from the finance minister overnight is on balance a positive from a credibility perspective.
  • The possibility of intervention can't be ruled out if the market turns disorderly, but it is also notable that Governor Ueda played down the importance of the yen earlier today. DB would frame the ongoing yen collapse around the following points:
    • Yen weakness is not that bad for Japan. Growth is fine and the government is helping offset some of the import costs via subsidies and core inflation is not accelerating. Most importantly, the Japanese are huge foreign asset owners via Japan's positive net international investment position.
    • There simply isn't an inflation problem. Japan's core CPI is around 2% and has been decelerating in recent months.
    • Negative real rates are great. There is a huge attraction to running negative real rates for the consolidated government balance sheet.
  • The bottom line is that for the JPY to turn stronger the Japanese need to unwind their carry trade. But for this to make sense the Bank of Japan needs to engineer an expedited hiking cycle similar to the post-COVID experiences of other central banks.
HomepageBulletMarketsFixed Income BulletsForeign Exchange BulletsBank of Japan (BOJ) Market News

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.