Japan's policy crossroads getting messier 🇯🇵
Nearly 9 in 10 economists now say PM Takaichi's fiscal stance is weakening the yen—no surprise when you're printing stimulus while the BOJ tries to tighten.
7 in 10 economists call last summer's FX intervention a flop. Burning reserves to defend currency levels rarely works when the underlying policy mix is pulling the other way.
Rate path expectations just shifted hard: 57% now see the BOJ hiking to 1.25% by September, up from 5% before. Over half expect at least 1.50% by early 2027.
The contradiction is loud: fiscal expansion vs monetary tightening. One of these forces will have to give. For now, the yen is caught in the middle, and traders are pricing in a faster normalization cycle than anyone thought possible six months ago.
Watch $EWJ and how this plays into broader risk appetite.
Nearly 9 in 10 economists now say PM Takaichi's fiscal stance is weakening the yen—no surprise when you're printing stimulus while the BOJ tries to tighten.
7 in 10 economists call last summer's FX intervention a flop. Burning reserves to defend currency levels rarely works when the underlying policy mix is pulling the other way.
Rate path expectations just shifted hard: 57% now see the BOJ hiking to 1.25% by September, up from 5% before. Over half expect at least 1.50% by early 2027.
The contradiction is loud: fiscal expansion vs monetary tightening. One of these forces will have to give. For now, the yen is caught in the middle, and traders are pricing in a faster normalization cycle than anyone thought possible six months ago.
Watch $EWJ and how this plays into broader risk appetite.