Today’s Notable Sentiment Shifts

USDJPY – The dollar surged on Tuesday to a 20-year high against the Japanese yen, underpinned by the divergence in monetary policy between a Federal Reserve determined to keep a lid on soaring inflation and a Bank of Japan that has kept interest rates ultra-low.

Additionally, Morgan Stanley argues that the yen’s decline versus the dollar is justified amid Japan’s worsening terms of trade, with soaring raw materials driving up import costs, as well as contrasting inflation outlooks between the countries.