USD Strength Could Create Massive Global Deflationary Wave

USD Strength – Even though investors have been fleeing Japanese equities fearing the failure of Abenomics, analysts at Macquarie believe we might be close to an inflection point. In their April 13 research note titled “Rights, Wrongs & Returns,” Viktor Shvets and colleagues suggest that the Fed must avoid adding fuel to the fire by minimizing policy divergences.

Yen vs USD Strength

Investors worried about failure of Abenomics

If one considers GDP growth as a single measure since Shinzo Abe, Prime Minister of Japan, took office in 2012, he would conclude that Abe’s policies are clearly not working. Abenomics relies on a weak yen to push up corporate earnings while...