The JPY has weakened sharply during June falling below last year’s lows. Lee Hardman, Senior Currency Analyst, and Simon Mayes, Director of MUFG’s Global Customer Marketing Group for EMEA in London, discuss what has been driving recent JPY weakness & the risk of intervention.   

After two event-packed weeks including the FOMC, ECB and BoE meetings and Fed Chair Powell’s semi-annual testimony, Derek Halpenny, Head of Research, Global Markets EMEA and International Securities, discusses with Shan Husain, Vice President FI FX Sales, what the implications are for FX and rates going forward.

Derek also looks ahead to the ECB Annual Forum on Central Banking in Sintra, Portugal next week and the key incoming economic data that will help shape the direction of financial markets.

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Despite having to navigate the (i) war in Ukraine (and its reverberations on global energy and food prices); (ii) aggressive rate hikes; as well as (iii) draconian Chinese lockdowns, emerging markets demonstrated remarkable resilience in H1 2023.

In a world of tightening global financial conditions and questions about the liquidity implications of the now-finalised US debt ceiling, Ehsan Khoman, Head of Commodities, ESG and Emerging Markets Research (EMEA), expects a heightened degree of macro risks for emerging markets in H2 2023, with external funding requirements the central concern. Still, he believes the silver lining is that subdued growth should cap inflation, facilitating monetary policy easing where external balances allow.

Disclaimer: www.mufgresearch.com (PDF)