Sharma: Dollar-Yen Is Classic Policy Divergence

The video discusses the yen's turbulent year, influenced by the Bank of Japan's policies and global economic dynamics. It highlights the impact of policy divergence between the US and Japan, with the Fed's rate hikes contrasting Japan's anchored JGB yields. The discussion covers market reactions, global dynamics, and currency trends, emphasizing the strengthening dollar against the yen and euro. The video also explores the implications of political risks and the broader economic outlook for 2017.

What major event is mentioned as having raised 'animal spirits' and influenced the dollar-yen exchange rate?

• The G7 Summit

• The Paris Agreement

• Trump's election

• Brexit

Which central bank is described as being on the verge of a rate hike cycle?

• Bank of England

• Federal Reserve

• European Central Bank

• Bank of Japan

What is the yen described as in terms of market behavior?

• A deflationary currency

• A risk-on/risk-off currency

• A stable currency

• A growth currency

What is the target dollar-yen rate mentioned for the next year?

• 110

• 125

• 115

• 120

What is the main force driving the broad-based strength of the dollar?

• Political stability

• Improving growth expectations

• Trade agreements

• Decreasing inflation