The yen’s rebound has further to run as the BoJ continues its policy normalisation while other major central banks ease policy

We still think the yen will outperform other G10 currencies as the BoJ continues to gradually normalise policy while other central banks cut their policy rates. Shrinking interest rate differentials and a more uncertain global backdrop will help the yen finally turn the corner on a sustained basis. What’s more, the yen is far weaker than our assessment of its medium-term fundamental “fair value”.