USD/JPY: the macro gap
On the Macro Currency Strength Meter, the US Dollar scores +4 and the Japanese Yen scores +19 — a gap of 14 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
-14.2
Stronger side
JPY
Edge is
Narrowing
Scores
+4 vs +19
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 | +2 | +52 | -49.3 |
| Growth | +4 | +49 | -44.8 |
| Positioning | +31 | -15 | +45.2 |
| Risk Mood | -26 | -44 | +17.6 |
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