- USD/JPY has continued to trade lower through 2020, as markets struggle to justify a premium for the U.S. dollar, across USD FX crosses.
- The weaker USD premium (with reference to purchasing power parity models) has enabled conventional safe havens such as JPY to strengthen.
- This has occurred in spite of the fact that risk sentiment remains broadly strong after the crash of Q1 2020.
- The real yield differential for USD/JPY lends further support to USD weakness. We can expect further USD/JPY weakness into 2021.
For further details see:
USD/JPY: Likely To Keep Falling Into 2021 As The Pair's Real Yield Remains Subdued