Japanese Yen Interest Rate Forecast

[B]Japanese Yen Interest Rate Bias: Neutral[/B]

<font size=“3”>Japanese Yen interest rate forecasts have arguably played little role in the valuation of the US Dollar/Japanese Yen forex pair, and instead we see that global risk appetite and the US dollar dominate price movements in the low-yielding Yen. Given the lowest short-term interest rate among industrialized nations of 0.50 percent, traders will often sell the JPY against higher-yielding counterparts to collect the difference in rates. That said, it would likely take a truly material shift in Japanese rate forecasts to have a noteworthy impact on large interest rate spreads against currencies like the Australian and New Zealand dollars.