Quantitative tightening in the United States vs quantitative easing in Japan = Dollar up, Yen down!

Recently, expectations for US rate cuts have faded, and the rise in US long-term interest rates and a stronger dollar have continued. However, the increase in long-term rates is partly the result of quantitative tightening policy (QT). The contrast between Japan, which maintains an accommodative monetary environment even after the removal of negative interest rates, and the United States, which continues QT, is large, and it is natural to think that the interest rate differential between the US and Japan will not narrow. This will be explained together with the future path of the USD/JPY exchange rate.(※1The followingQTresults in certain effects. It is natural to expect that the interest rate gap between the US continuing QT and Japan maintaining quantitative easing will not narrow. This will be explained together with the future path of the dollar-yen exchange rate.

(※1Policy to reduce the money supply in the market to curb economic activity such as investment and consumption. Specifically, through quantitative easing, the method involves stopping reinvestment at maturity of assets purchased or reducing assets through sales.)