The combination of heightened geopolitical risk (US-China tensions, California unrest) and softening US macro momentum (CPI risks + fragile market sentiment) supports safe-haven flows. If today's CPI print comes in soft or signals waning inflation pressure, it could trigger a wave of USD selling especially if the market starts to doubt further Fed hikes.

Meanwhile, Japan still benefits from capital repatriation flows during global risk-off episodes. Although the BoJ remains dovish, in times of macro instability, the yen tends to outperform especially when equity volatility rises and global yields soften.

SHORT USDJPY

Jun 10 2025