Bloomberg Surveillance · Wednesday, July 8, 2026
Mark McCormick explains that the Japanese Yen is weakening against the dollar due to the Federal Reserve's hawkish stance and Japan's ongoing terms of trade shocks, including high natural gas prices. He anticipates the dollar-yen exchange rate to remain between 1.60 and 1.65.
“The rates factor is the most dominant factor in currencies, and you could argue in Marcus, this isn't just goldilocks, This isn't risk on, risk off. It's something that's new. This is a new policy driven environment where we're going to have more macro volatility.”
“The boj is absolutely behind the curve and they're not going to get ahead of the curve. So now you have rate different along with you know, this is also for Japan, not crude oil story. It's natural gas. So if you look at the contract that's traded in Asia on liquefied natural gas, it hasn't come down. So you're still dealing with a terms of trade shock, You're dealing with higher rates, and you're dealing with an environment where dollar yen should would be between one sixty and one sixty five.”