USD/JPY is down 24 pips to 110.51
US 10-year rates continue to drift lower today, falling 5.4 bps to 1.47% and that's weighing on USD/JPY.
Credit Agricole CIB Research maintains a bullish bias on USD/JPY, expressing this view via holding a long exposure in spot targeting a move towards 115.
"USD/JPY remains supported, by the push higher in the US-Japan short-term rates differential. Indeed, while the US-Japan yield box is a major driver of the exchange rate, so too is the US-Japan short-term rates differential," CACIB notes.
"In the medium term, we continue to think a gradual move towards the exit by the Fed will see USD/JPY track higher to 115 and remain long USD/JPY, as a trade recommendation," CACIB adds.
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