HSBC are not wrong. From a note late last week:
- “After years and years of losing competitiveness, exporters are at last feeling the lift from exchange rate realignment. And, one might suspect, an even weaker exchange rate, and for longer, may be needed, to turn the lift into an enduring manufacturing renaissance”
Says a weaker yen
- is boosting Japan’s service sector
- boosting tourism
- helping lift inflation expectations
- “A weaker yen, in other words, is not entirely unwelcome, as long as the decline is orderly. Thus, don’t expect the BOJ to rush into aggressive tightening just because the exchange rate is wobbly”
USD/JPY update to begin the week:
This article was written by Eamonn Sheridan at www.forexlive.com. Source