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2 Apr 2013
Forex Flash: What to do with the USD/JPY? – Danske Bank, Commerzbank and BTMU
FXstreet.com (Barcelona) - The BoJ will hold its 2-day meeting tomorrow and all the eyes will be upon the new Governor H.Kuroda and his long-waited announcements regarding measures to achieve the new 2% inflation target.
“JPY has been the big winner over the Easter period as poor US data have added to safe-haven demand ahead of the Bank of Japan meeting later this week where we expect that a set of changes to the asset-purchase programme, including making it open-ended, will weigh on the yen”, commented Senior Analyst C.Tuxen at Danske Bank.
In addition, Karen Jones – Head of FICC Technical Analysis at Commerzbank – suggested the cross “has eroded the 4 month uptrend and its 55 day ma at 93.13. It is possible that the move lower is simply an ‘a-b-c’ correction lower, but there is currently little impetus to bounce higher and we would allow for slippage to 92.09 and possibly 89.23, the 23.6% and 38.2% retracements”.
Lee Hardman, Currency Analyst at BTMU, argued “Current consensus expectations are for the BoJ to raise the total monthly purchase amount of JGBs from the current rate of just over JPY4.0 trillion towards JPY5.0-6.0 trillion. The BoJ is also expected to announce that it will purchase more longer-dated JGBs by removing the current 3-year limit fro JGB purchases under the APP. The yen weakening impact of the announcement will be dampened by already high expectations”.
“JPY has been the big winner over the Easter period as poor US data have added to safe-haven demand ahead of the Bank of Japan meeting later this week where we expect that a set of changes to the asset-purchase programme, including making it open-ended, will weigh on the yen”, commented Senior Analyst C.Tuxen at Danske Bank.
In addition, Karen Jones – Head of FICC Technical Analysis at Commerzbank – suggested the cross “has eroded the 4 month uptrend and its 55 day ma at 93.13. It is possible that the move lower is simply an ‘a-b-c’ correction lower, but there is currently little impetus to bounce higher and we would allow for slippage to 92.09 and possibly 89.23, the 23.6% and 38.2% retracements”.
Lee Hardman, Currency Analyst at BTMU, argued “Current consensus expectations are for the BoJ to raise the total monthly purchase amount of JGBs from the current rate of just over JPY4.0 trillion towards JPY5.0-6.0 trillion. The BoJ is also expected to announce that it will purchase more longer-dated JGBs by removing the current 3-year limit fro JGB purchases under the APP. The yen weakening impact of the announcement will be dampened by already high expectations”.