The weak JPY seems ripe for a correction going into next year – Nordea
Economists at Nordea analyze FX markets.
Risk-sensitive currencies such as NOK and SEK to benefit if inflation “magically” disappears
The FX volatility will continue without any clear winners in the second half of the year (an exception could be the JPY).
Inflation data will be decisive for central banks and in turn FX markets. If inflation ‘magically’ disappears, risk-sensitive currencies such as NOK and SEK stand to benefit in particular. But as long as inflation stays priority number one for the Fed and ECB, USD and EUR will remain in favour instead of risk-sensitive FX.
The weak JPY seems ripe for a correction going into next year on the back of policy normalisation in Japan.
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FXStreet Insights Team
FXStreet
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