CIBC FX Strategy Research argues that the Bank of Japan is simply not in a position to join the recent hawkish shift in the tone of developed markets central banks.
“Despite what appears to be a relatively tight labour market in Japan, consumer prices remain stagnant. The fact that the BoJ doubled down on its commitment to keep 10-year yields at 0% in the face of rising global yields only reinforces the view that there will be some policy divergence in the near term,” CIBC adds.
Against this backdrop, CIBC expects the JPY top stay as a laggard among major currencies over the remainder of the year.
Source: CIBC Economics – CIBC Capital Markets
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