Key Takeaways:
UBS lowered USDJPY forecasts to 145 for end-2025 and end-2026
Growing confidence in BOJ’s ability for rate hikes
UBS remains short EURJPY, expecting a decline
USD trading near mid-November highs despite tariff announcements
Political uncertainty in Europe could weigh on the euro
Traders focus on US ADP report, US ISM Services PMI, and upcoming Nonfarm Payrolls (NFP) report
UBS remains short EURJPY, expecting decline to 151 by end of 2025- Period of stability in G10 FX market despite Trump’s tariff-related announcements
- Political uncertainty in Europe could weigh on the euro
USD/JPY pair gains traction, reaching fresh daily high around 150.55 region
US Treasury bond yields rise, driving flows away from lower-yielding Japanese Yen (JPY)
Expect 5% contraction in earnings per share for Stoxx 600
Economic Insights:
The financial landscape is currently experiencing a series of shifts and trends that are impacting various currencies and markets. Here are some key takeaways to consider:
- UBS has revised its USDJPY forecasts, highlighting a potential downward trend in the currency by the end of 2025 and 2026. This adjustment could have implications for investment strategies and market sentiments.
- The growing confidence in the Bank of Japan’s ability to implement rate hikes suggests a possible shift in monetary policies that could affect the yen’s value and trading dynamics.
- UBS’s short position on EURJPY reflects a bearish outlook on the euro, citing expectations of a decline in the currency’s value. This projection underscores the importance of monitoring geopolitical events and economic indicators.
- Despite tariff announcements, the USD continues to trade near mid-November highs, signaling resilience in the currency amidst market uncertainties and trade tensions.
- Political uncertainty in Europe poses a potential risk to the euro’s stability, emphasizing the need for investors to stay informed about geopolitical developments and their impact on financial markets.
- Traders are closely monitoring key reports like the US ADP report, US ISM Services PMI, and the upcoming Nonfarm Payrolls (NFP) report, which could offer insights into the health of the US economy and influence market movements.
- Expectations of a 5% contraction in earnings per share for Stoxx 600 companies highlight potential challenges for European stocks and the importance of adjusting investment strategies accordingly.