USD/JPY Trade Could Edge Higher: Credit Agricole

The video discusses the impact of a potential US government shutdown on safe haven demand and the US dollar, noting that the dollar may weaken against other safe havens like the Swiss franc, yen, and gold during a shutdown. It also covers the Japanese yen's position, rate differentials, and potential intervention by Japanese policymakers. The discussion includes the effects of verbal and actual intervention on market volatility and exchange rates, with a focus on the economic implications of these factors.

What typically happens to the U.S. dollar during a government shutdown?

• It strengthens against all currencies.

• It weakens against other safe havens.

• It remains stable.

• It strengthens against the yen only.

What is a significant factor driving the value of the Japanese yen?

• Trade agreements with Europe

• Rate differentials between Japan and the U.S.

• Tourism rates

• Oil prices

What is the role of verbal intervention in currency markets?

• To increase interest rates

• To directly change exchange rates

• To signal potential future actions

• To impose trade restrictions

What level of verbal intervention indicates that Japan is closely monitoring FX markets?

• Level 6

• Level 7

• Level 5

• Level 3

Why is the real effective exchange rate important for Japan?

• It influences stock market performance.

• It determines trade tariffs.

• It impacts purchasing power and inflation.

• It affects tourism rates.