If you believe the Federal Reserve is done hiking rates and will be forced to ease policy aggressively next year as a new US economic downturn begins, it’s hard to be bullish USD/JPY or the Nikkei 225 given the role yield differentials and FX fluctuations have played in underpinning both this year. Base case scenario is no more Fed hikes, plenty of cuts next year, according to markets: The scenario detailed above is, except for uncertainty about the trajectory for the US economy, now the accepted base case scenario based on recent market movements. In the wake of the Federal Reserve’s November interest rates ... (full story)