Americas FX Morning Bullets 2 July 2026

Research evidence excerpt

Americas FX Morning Bullets 2 July 2026

Currencies ● Global

2 July 2026

A sharp drop in USD-JPY has reignited intervention chatter, with the market highly

sensitive to any sign the MoF might act after USD-JPY pushed further above 160 over the

past month. Japan’s vice finance minister Mimura refused to comment on FX levels, which will do

little to dampen speculation. That said, it is not clear what drove the move lower in the first place,

leaving room for the usual mix of stop-loss dynamics and position adjustment to be doing some of

the heavy lifting. Earlier comments from Japanese officials also suggest a shift in tactics. Rather

than leaning on broad, repeated signalling to remind markets of intervention risk, the emphasis is

moving towards a more targeted campaign aimed at squeezing speculators and raising the cost of

betting against the yen. If that is the playbook, sharp USD-JPY pullbacks may become more

frequent even without an obvious headline, keeping the market nervous at these levels.

We have published our latest quarterly LatAm Multi-Asset Outlook, called Election hopes

& slippery slopes. We have had a positive view on LatAm macro for over a year, premised on

reform hopes, resilient growth, and strong fundamentals. We now see a more idiosyncratic

outlook, driven by diverging policy risks across the region. Recent Andean elections have led to

investor-friendly outcomes, but now attention is shifting to Brazilian elections in October.

Meanwhile, the regional growth backdrop is holding up – albeit with near-term weakness in

Chile and Mexico – as inflation risks are rising, especially related to El Niño, while a stronger

USD will also present challenges. Despite risks, we remain relatively constructive on FX in the

region.