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1:50 PM ยท 13 September 2024

USDJPY drops to lowest levels since early 2024 ๐Ÿ“‰

The Japanese yen leads gains in today’s FX session amid uncertainty over the size of the expected Fed rate cut and BoJ bankers’ continued willingness to continue the rate hike cycle. USD/JPY is down 0.7% and is breaking out to levels not seen since January of this year.

Options positioning continues to support the yen’s gains, although the extent of USDJPY hedging has been decreasing since early August. Source: Bloomberg Financial LP

The spread between Japanese and US interest rate expectations has undermined the long-standing USDJPY carry trade, triggering a slide in USDJPY. The renewed expectation of a 50 basis point US rate cut next week is putting further pressure on the dollar, strengthening the Fed’s heavily policy-dependent yen. Source: Bloomberg Financial LP

USDJPY breaks to the lowest levels since early 2024.  Source: xStation

 

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