12 December 2022 | Other

HSBC: dollar could move higher against the yen amid hawkish Fed stance

HSBC economists believe that the U.S. dollar is likely to rise against the yen. This is due to the Fed’s hawkish stance.

In fact, USDJPY is linked to yield differentials between the two countries. But there is no risk for the foreign exchange market to be intervened by the Ministry of Finance of Japan. So, the potential for the yen to strengthen against the dollar is limited, despite the remaining risks of interference.  

Further monetary tightening by the Fed is likely to lead to the yen weakening against both the U.S. dollar and the euro. However, increased concerns on China's economic outlook could offer support to the Japanese currency. 

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