FX

It “has plenty of ammunition in the form of FX reserves if it feels the need to intervene further,” the economist said.

“After the budget balance had improved in recent years and even trended toward a balanced budget, we expect a deterioration in 2026,” the FX strategist says.

“Even if risk sentiment deteriorates further, USD/JPY is expected to see further upside while high-beta EM FX could be vulnerable,” it adds.USD/JPY is at 156.6, according to LSEG.

“Even if risk sentiment deteriorates further, USD/JPY is expected to see further upside while high-beta EM FX could be vulnerable,” it adds.

In FX markets, eyes will be on any moves by the central bank to steady the rupee.