HSBC is warning of renewed downside pressure on the Japanese yen in the near term, citing a combination of
U.S. monetary policy risks, domestic political uncertainty, and cautiousness from the Bank of Japan.While HSBC economists believe the BoJ’s recent upward revisions to its inflation and growth forecasts strengthen the case for a 25 basis point rate hike in October, they note that the central bank may choose to wait for the Federal Reserve to act first before moving further toward policy normalisation.
In a note to clients, HSBC outlined two key reasons for its near-term bearish view on the yen:
Firstly, USD/JPY remains highly sensitive to
hawkish Fed risks,
strong U.S. economic data,
and a still-dovish Bank of Japan. All three factors have been present in recent sessions, pushing the yen weaker against the dollar.
Secondly, the USD/JPY pair has recently been tracking Japanese government bond (JGB) yields, which remain under pressure amid growing domestic uncertainty.
HSBC highlights risks stemming from potential shifts in the ruling Liberal Democratic Party (LDP) leadership and concerns over Japan’s fiscal trajectory. If political leaders lean toward more pro-easing fiscal or monetary policies, HSBC warns, the yen could weaken further.The note underscores the complex cross-currents facing the JPY, with global rate dynamics and local political risks both contributing to its vulnerability.
This article was written by Eamonn Sheridan at investinglive.com.Hence then, the article about hsbc expects further jpy weakness boj may wait for fed before next hike was published today ( ) and is available on forex live ( Middle East ) The editorial team at PressBee has edited and verified it, and it may have been modified, fully republished, or quoted. You can read and follow the updates of this news or article from its original source.
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