MUFG: JPY now the best-performing G10 foreign money in 2025, staying brief EUR/JPY

MUFG highlights the JPY because the best-performing G10 foreign money in 2025, pushed by narrowing yield differentials and stronger-than-expected Japanese GDP progress. They preserve a brief EUR/JPY place, concentrating on 150.

Key Factors:

1️⃣ JPY is the Greatest-Performing G10 Foreign money in 2025

• JPY has strengthened by four.eight% vs. USD and four.zero% vs. EUR YTD.
• USD/JPY has fallen beneath 150.00, approaching key assist ranges.

2️⃣ Yield Differentials Proceed to Slender

• The 10-year UST-JGB unfold has tightened by ~50bps, falling to its lowest since earlier than the US election.
• JGB yields surged to 1.45%, greater than doubling up to now yr, reflecting rising BoJ coverage normalization expectations.

three️⃣ Stronger Japanese Progress & Wage Pressures Help BoJ Hikes

• This fall GDP grew by 2.eight% Q/Q, following 1.7% Q3 progress, indicating financial resilience regardless of BoJ price hikes.
• BoJ sees sustained wage progress, with full-time base pay rising three.zero%—per the two% inflation goal.
• Upcoming wage negotiations (Shunto) on March 14 can be key for BoJ coverage route.

four️⃣ Staying Quick EUR/JPY, Concentrating on 150

• BoJ’s continued hawkish tilt and yield unfold compression ought to drive additional JPY power vs. EUR.
• MUFG maintains its brief EUR/JPY commerce, anticipating a decline in the direction of 150.

Conclusion:

MUFG stays bearish on EUR/JPY, anticipating JPY power to persist because of tightening yield differentials, stable financial progress, and stronger wage pressures. They preserve a brief EUR/JPY place, concentrating on 150 (spot at 157.00).

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This text was written by Adam Button at www.ubaidahsan.com.



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