USD/JPY: the macro gap
On the Macro Currency Strength Meter, the US Dollar scores +2 and the Japanese Yen scores +25 — a gap of 23 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 US Dollar — though markets may already have priced much of it in.
Strength gap
-22.8
Stronger side
JPY
Edge is
Widening
Scores
+2 vs +25
Factor by factor
Positive is stronger relative to the other majors, not in absolute terms. The gap column is USD minus JPY.
| Factor | USD | JPY | Gap |
|---|---|---|---|
| Interest Rates | -28 | +51 | -79.3 |
| Growth | +30 | +36 | -5.8 |
| Positioning | +35 | +16 | +18.3 |
| Risk Mood | -19 | -32 | +12.6 |
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