Yen Needs More Intervention to Hold Gain: 3-Minutes MLIV

Summary

Mark Cudmore examines whether yen intervention can hold gains, citing the critical 155 level in USD/JPY. He also argues that new Chinese AI models will democratize AI returns, leading to rest-of-world equities outperforming the US, while Korea's memory chip names face headwinds.

• USD/JPY needs to break below 155 for intervention to sustain yen strength; otherwise dollar bounce likely.
• Fed meeting undermined dollar credibility, making the dollar vulnerable long term.
• New Chinese AI models seen as a momentous market event that changes the AI trade.
• Hyperscaler business model threatened, with returns from AI set to be spread globally.
• Rest-of-world equities expected to resume outperforming US stocks on AI democratization.
• Korea's two big memory chip stocks likely to suffer from reduced AI compute demand.
• Europe an additional beneficiary from lower oil prices within the global rotation.