Barclays on what’s driving yen selling (spoiler: carry trade). And an intervention warning

Barclays analysts say their modelling indicates the recent decline is not explained by rates or equities, but it’s the resurgence of the carry trade that’s responsible. Which is a rates story anyway, right?

Barlcays project a change though, forecasting USD/JPY towards 130 by the first half of 2024:

  • “The policy divergence story is going to turn, if it hasn’t already”

In the shorter term, a mild intervention warning:

  • “The risk of intervention definitely increases above 145, but the urgency is less.”

USD/JPY update, still climbing:

This article was written by Eamonn Sheridan at Source