CAD/JPY: the macro gap
On the Macro Currency Strength Meter, the Canadian Dollar scores -4 and the Japanese Yen scores +25 — a gap of 29 points in favour of the Japanese Yen. The widest divergence is in interest rates, which favours the Japanese Yen. All else equal that gap is a fundamental tailwind for the Japanese Yen against the Canadian Dollar — though markets may already have priced much of it in.
Strength gap
-29.0
Stronger side
JPY
Edge is
Widening
Scores
-4 vs +25
Factor by factor
Positive is stronger relative to the other majors, not in absolute terms. The gap column is CAD minus JPY.
| Factor | CAD | JPY | Gap |
|---|---|---|---|
| Interest Rates | -24 | +51 | -75.7 |
| Growth | -28 | +36 | -63.3 |
| Positioning | +30 | +16 | +13.4 |
| Risk Mood | +19 | -32 | +50.4 |
| Commodities | -1 | — | -1.1 |
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