The BoJ’s surprise decision to widen the tolerance band around its yield curve control target earlier this week will hopefully prove the final curveball of what has been an eventful year across currency markets. The yen has surged around 3% against the US dollar in the wake of the BoJ’s unexpected announcement, and more against some other G10 currencies, which have generally fallen against the greenback as risk sentiment has worsened in recent days amid renewed concerns that central banks are on path towards overtightening policy. We expect more of the same next year: we anticipate that the dollar will rebound further over the first half of next year as the global economy continues to falter and risk sentiment deteriorates across markets.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services