As per the Abenomics, which eyes on fresh fiscal easing, made possible by the fact that the BOJ has already bought a decent chunk of the government’s debt. That edges Japan closer to central-bank financed fiscal policy and raises the stakes – for the economy and the currency.
The capital outflows referred to above will remain JPY negative until at least mid-2016. And this figure does not include other public pension funds that follow GPIF and have only just started reallocating
If this latest throw of the dice delivers a sustainable acceleration in growth, the yen has scope to recover further, but the jury’s out.
However, the balance of payments data show significant long-term capital outflows from Japan, which suggest that the yen’s bounce, at these levels, is overdone.
As a result, we could foresee the USD/JPY to claw its way back above 110 in the coming months.
The Bank of Japan remains concerned by yen strength and could prevent a move below 100.
Since 1-3m IVs in this pair seems to be considerably spiking, the leveraged call spread can be deployed in FX portfolios saying thanks to high 2m volatility.


Bank of America Predicts Yen Rebound as USD/JPY Faces Risks
Australia Consumer Confidence Plunges as RBA Rate Hike Hits Households
Fed’s Hammack Says More Data Needed Before Next Rate Move
Hong Kong’s Second Solana ETF Launches With Lower Fees
Fed’s Williams Sees One More Rate Hike in 2026, None in 2027
ECB May Stop Rate Hikes After December, Capital Economics Says
RBA Hikes Interest Rate to 4.60% as Inflation Risks Rise
RBI Rate Hike Bets Surge as Inflation Rises
Crypto Derivatives Dashboard: Bulls Retain Control Amid $488M Liquidation Flush
Visa Wins China Approval to Prepare Domestic Payments Expansion
XRP Ledger Foundation Confirms 100B Supply Safe After Security Fix
Trump Demands Powell Resign Over Fed Renovation Cost Overruns 



