USD/JPY: Higher rates in Japan bundled with cuts elsewhere should give a stronger Yen ahead – Nordea

Over the past two years, we have seen that the major G10 currencies (except the Japanese Yen) have enjoyed the limelight at the cost of smaller currencies. Looking ahead, analysts at Nordea favour the JPY.

Normalisation of monetary policy in Japan to begin this year

Eventually, cyclical currencies should start to perform once global growth is allowed to pick up steam and inflation becomes less of a concern.

The JPY has been a huge disappointment over the last two years. We expect the normalisation of monetary policy in Japan to begin this year. Higher rates in Japan bundled with cuts elsewhere should give a stronger JPY ahead.