Quarterly Outlook
Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy
Chief Investment Strategist
Summary: The sell-off in Japanese Yen has accelerated as USDJPY cleared the 155 hurdle. Intervention threats have been modest at best, given the strong USD could make any intervention futile. Markets may test 160 as the next line-in-sand, although the move can be slowed if the Bank of Japan adopts a hawkish rhetoric or tweaks its bond purchases.
Despite 152 and then 155 being seen as the lines-in-the-sand for USDJPY intervention, USDJPY has traded to fresh 34-year highs.
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