CAD/JPY: the macro gap
On the Macro Currency Strength Meter, the Canadian Dollar scores -20 and the Japanese Yen scores +30 — a gap of 50 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
-49.6
Stronger side
JPY
Edge is
Widening
Scores
-20 vs +30
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 | -25 | +53 | -77.3 |
| Growth | -14 | +37 | -50.6 |
| Positioning | -44 | -3 | -41.2 |
| Risk Mood | -12 | +19 | -30.7 |
| Commodities | +7 | — | +7.1 |
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