Yen bears will argue that the currency is trading as an inflation proxy, pointing to rising inflation expectations as the culprit for recent and ongoing weakness. Bulls will argue that recent yen weakness is more a function of the big move up in the US dollar, and is temporary in nature. While our trending indicators continue to suggest a bearish outlook for the yen, we ultimately side with the bulls. Later this quarter, we expect an ongoing deterioration in risk sentiment to push up the yen. Specifically, the yen is likely to strengthen thanks to an (1) ongoing slowdown in global growth, (2) a peak in US growth, and ... (full story)