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21 Feb 2014
Flash: USD/JPY potential upside ahead - BTMU
FXStreet (Barcelona) - Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ, observes that the USD/JPY could resume its upside in the near-term.
Key Quotes
"Such thinking is also evident in the foreign exchange market with the USD/JPY rate having grinded higher throughout February despite weakening US economic data releases, although it also reflects an easing of emerging market concerns in the near-term. Economic data releases in the coming months should provide more clarity upon the underlying performance of the US economy as weather conditions normalise."
"If the US economy regains upward momentum as we anticipate then USD/JPY will likely continue to drift higher resuming its upward trend. In the near-term, the yen still appears too strong relative the recent rebound in global equity markets."
"BoJ Governor Kuroda has been speaking overnight and noted that it is still too early for detailed discussion of an exit from easing, with the BoJ only half way on the path to reaching their 2.0% inflation target. He also stressed that Japan can’t wait for fiscal consolidation viewing a loss of fiscal trust as a negative for ending deflation as yields will rise more than justified by the health of the economy."
Key Quotes
"Such thinking is also evident in the foreign exchange market with the USD/JPY rate having grinded higher throughout February despite weakening US economic data releases, although it also reflects an easing of emerging market concerns in the near-term. Economic data releases in the coming months should provide more clarity upon the underlying performance of the US economy as weather conditions normalise."
"If the US economy regains upward momentum as we anticipate then USD/JPY will likely continue to drift higher resuming its upward trend. In the near-term, the yen still appears too strong relative the recent rebound in global equity markets."
"BoJ Governor Kuroda has been speaking overnight and noted that it is still too early for detailed discussion of an exit from easing, with the BoJ only half way on the path to reaching their 2.0% inflation target. He also stressed that Japan can’t wait for fiscal consolidation viewing a loss of fiscal trust as a negative for ending deflation as yields will rise more than justified by the health of the economy."