Currency news and forecasts for Canadian Dollar and Japanese Yen
Whenever you are researching a particular exchange rate you are actually interested in two currencies as the value of a currency must always be quoted relative to a second currency.
So it follows that if you are determining the best time to transact, in this case the CAD vs JPY, you should pay attention to both Canadian Dollar and Japanese Yen news and forecasts.
Canadian Dollar (CAD) - Market news and forecasts
5-December-18: In early December, the Canadian dollar traded at C$1.34 per USD — its weakest level in 18 months. It did so after traders revised down their expectations for future Canadian interest rate hikes following a dovish Bank of Canada meeting.
Also not helping the loonie in late 2018 has been the oil price which, by the time of this report, had slumped 30 percent from 2018 highs. Oil is Canada’s largest export.
In December, several FX analysts expressed a belief that inevitable OPEC production cuts will create a rebound in the oil market, which will drive the Canadian dollar higher throughout 2019.
Risks to the Canadian dollar include, of course, oil, and the return of global trade tensions. Tensions eased in early December when US and Chinese leaders agreed to suspend tariff increases for 3 months.
Also in December, Citibank offered a “long-term” (>18 months) forecast for USD/CAD of 1.2, representing potential CAD appreciation of 12 percent.
Japanese Yen (JPY) - Market news and forecasts
As December 2018 began, the yen was little changed year-to-date, at levels near 113.6 to the US dollar.
As year-end approached, analysts considered the yen’s future, and appeared to agree that the low-yielding currency would strengthen throughout 2019 and beyond.
The median estimate of economists polled by Bloomberg in December indicated USD/JPY — the benchmark yen exchange rate — falling to 105 by the end of 2019, which marks yen strength of 8 percent from December’s opening rate. Experts at Mizuho, Citibank and Commerzbank saw the yen strengthening even further, to 100 or stronger. USD/JPY hasn’t traded at the symbolic 100 level since August 2016.
Yen strength will be driven by tighter Japanese monetary policy, experts said, and by a slower pace of policy tightening in the US. The US-Japanese interest rate differential will narrow.
At the time of writing, the yen was 5 percent higher on the year against both the euro and Australian dollar, at respective rates of 129 and 83.5.