USD/JPY remains around 153.60 as Japan’s on-hold policy stance keeps the pair elevated despite yield-based valuation concerns, BBH FX analysts report.
Japan’s Vice Finance Minister for International Affairs, Atsushi Mimura, highlighted that USD/JPY is trading above the level implied by US-Japan bond yield differentials. “We agree,” the analysts noted.
However, the Bank of Japan’s on-hold policy stance means this divergence is unlikely to close anytime soon.
The swaps market continues to see a 50% chance of a December 25 basis points rate hike to 0.75%, with a full 25 basis points move priced in for January or March.
https://bitcoinethereumnews.com/finance/usd-jpy-consolidates-around-153-60-amid-divergence-bbh/