USD/JPY: Rising wages and risks to the YCC program to keep focus to the downside in H2 – CIBC

Market news

22 June 2023

USD/JPY: Rising wages and risks to the YCC program to keep focus to the downside in H2 – CIBC

Economists at CIBC Capital Markets discuss USD/JPY outlook.

Wages are the key

Although we remain biased towards USD/JPY downside, investors continue to wait on an obvious catalyst.

Rising corporate profitability provides scope to fund recently agreed-to high wage deals.

We expect rising wage dynamics to impact the BoJ CPI forecasts in the July policy report and for CPI forecast adjustments to be a catalyst for potential policy (YCC) tweaks. That should support 10-year spread compression and buttress our call for downside in USD/JPY in H2 and beyond.

USD/JPY – Q3 2023: 130 | Q4 2023: 127

Currencies. Daily history for Thursday, June 22, 2023

Commodities. Daily history for Wednesday, June 21, 2023

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