MUFG analysts warn that structural portfolio and FDI outflows continue to undermine the Japanese Yen, despite potential headwinds from shifting US yields and official intervention risks.
MUFG argues the yen remains under pressure from structural portfolio and FDI outflows, even as US yields correct and Washington opposes yen weakness. These outflows are a persistent bearish driver for JPY, although the US yield correction and US opposition to yen weakness could temper the slide.
US yields correcting and Washington's opposition to yen weakness could limit further depreciation, though MUFG sees structural outflows keeping pressure on the yen.
The Japanese Yen remains under significant downward pressure as structural portfolio and foreign direct investment outflows continue to weigh on the currency. While a correction in US yields and Washington's vocal opposition to yen weakness provide some potential support, MUFG analysts warn that these structural factors remain the primary drivers of the current bearish trend.
US yields correcting and Washington's opposition to yen weakness could limit further depreciation, though MUFG sees structural outflows keeping pressure on the yen.