The BoJ-Tankan’s large manufacturers’ business sentiment DI is a yardstick for Japan’s economic cycle. In the past, USD/JPY cycle has shown a tendency to lag the economic cycle by 1-2 years (Figure 1). From 2005, however, the dollar/yen and economic cycles coincided, and the linkage between the two cycles appears to have collapsed from 2008. What is different about the current USD/JPY cycle?
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Deutsche Bank