Macro Insights Weekly - FX storm brewing

Without much rise in volatility, global currencies have undergone large movements in recent years. Political pressure from the US could push up volatility.
DM and Asian EM FX have corrected, on average, by 10-12% against the USD, since 2022.
Most striking is the yen's 41% correction in two and a half years.
There are some economic considerations for the Japanese authorities to push for a stronger yen.
But we don't think they are compelling enough to push them toward vigorous intervention.
US policymakers, convinced of USD's overvaluation, may pusj for action. Expect volatility.