CAD/JPY: the macro gap
On the Macro Currency Strength Meter, the Canadian Dollar scores -9 and the Japanese Yen scores +44 — a gap of 52 points in favour of the Japanese Yen. The widest divergence is in interest rates, which favours the Japanese Yen. All else equal that gap is a fundamental tailwind for the Japanese Yen against the Canadian Dollar — though markets may already have priced much of it in.
Strength gap
-52.2
Stronger side
JPY
Edge is
Widening
Scores
-9 vs +44
Factor by factor
Positive is stronger relative to the other majors, not in absolute terms. The gap column is CAD minus JPY.
| Factor | CAD | JPY | Gap |
|---|---|---|---|
| Interest Rates | -33 | +52 | -85.0 |
| Growth | -20 | +44 | -63.3 |
| Positioning | +3 | +82 | -78.9 |
| Risk Mood | +15 | -24 | +39.0 |
| Commodities | +16 | — | +16.3 |
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