EUR/JPY: the macro gap
On the Macro Currency Strength Meter, the Euro scores -39 and the Japanese Yen scores +44 — a gap of 82 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 Euro — though markets may already have priced much of it in.
Strength gap
-82.4
Stronger side
JPY
Edge is
Widening
Scores
-39 vs +44
Factor by factor
Positive is stronger relative to the other majors, not in absolute terms. The gap column is EUR minus JPY.
| Factor | EUR | JPY | Gap |
|---|---|---|---|
| Interest Rates | -66 | +52 | -118.2 |
| Growth | — | +44 | -43.7 |
| Positioning | -26 | +82 | -108.6 |
| Risk Mood | -0 | -24 | +24.4 |
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