Summary
The Trump trade has driven continued dollar strength in the wake of Donald Trump's US presidential election victory. However, yen strength outpaced the dollar in November due to risk-off moves in response to escalation of the war in Ukraine and comments from BOJ Governor Kazuo Ueda indicating he favored a rate hike in the near future. We expect the focus to center on monetary policy decisions by the Fed and BOJ in December too. A Fed rate cut paired with a hike from the BOJ would put downward pressure on the USD/JPY. However, the USD/JPY's decline at the end of November was partly due to position adjustment around the Thanksgiving holiday, raising the possibility of a short-term rebound depending on moves by president-elect Donald Trump.
