Institution: The yen may rebound due to the prospect of interest rate hikes
On August 6, Rabobank of the Netherlands stated that if the US dollar continues to rise in the next few days, the yen may further decline. However, given the prospect of further interest rate hikes by the Bank of Japan, the fall of yen will be limited. Jane Foley, a foreign exchange strategist at Rabobank said in a report that as markets realize they should price for a cyclical recession in America rather than a crisis, expectations for U.S. interest rate cuts should weaken and this could lead to an increase in USD value. The stronger-than-expected Japanese income data on Tuesday proved that it is correct to believe that Bank of Japan will raise interest rates further; "This indicates that from a three-month perspective, USD/JPY will enter into downward channel."
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