In my contribution last week, I devoted many pages to the FOMC while saying very little about the BOJ policy meeting, and I argued that “the likelihood still leans toward further dollar strength and yen weakness.”
Although USD/JPY briefly fell into the mid-145s in the early hours of September 18 after the FOMC’s 25bp rate cut, it rebounded to just under JPY147 following Chair Jerome Powell’s press conference and, having digested the BOJ meeting on September 19, closed around JPY148.
U.S. equity markets have continued to set fresh record highs, suggesting that investors still assume U.S. economic strength.
