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Jun 17 - 06:55 PM

JPY: The Return Of The USD/JPY Carry Trade - Credit Agricole

By eFXdata  —  Jun 17 - 03:00 PM

Credit Agricole CIB Research discusses USD/JPY outlook and adopts a bullish bias and sees a scope for the return of carry trade. 

"The move higher in UST yields has led to them becoming the driving force of USD/JPY, especially with the BoJ committing to YCC and the Fed being sanguine about the rise in long-end yields. Professional but not retail investors have piled back into JPY-funded carry trades," CACIB notes.

"High inflation outcomes in the coming months will challenge the Fed’s ‘transitory inflation’ stance and lead to the market pricing in earlier tapering of its asset purchases and even rate hikes, which will drive UST yields and the USD higher," CACIB adds. 

Source:
Crédit Agricole Research/Market Commentary

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