QCP: Yen Strength and Energy Inflation Risks Coexist, Testing the Fed's Decision to Hold Rates Steady This Year

QCP released a thematic macro report stating that the yen's recent rapid appreciation was primarily driven by BOJ policy normalization, carry trade unwinds, and US dollar weakness. The sharp decline in Japan's foreign exchange reserves may be linked to intervention arrangements, and markets should remain alert to further intervention risks. On the inflation front, the spring uptick in PCE was mainly driven by energy prices. Although the energy contribution has receded, core PCE remains at 3.3%, indicating that inflationary pressures have not yet fully subsided.