USD/JPY: Weak Confidence Weighs - BTMU
Analysts at Bank of Tokyo Mitsubishi explained that recent market
reactions have clearly revealed the uncertainty surrounding QQE with a
negative interest rate.
Key Quotes:
"Next
week, USD/JPY is likely to drop further. In addition to the yen, recent
dovish comments by FOMC members may continue to support US dollar
selling. However, since the JPY long position in non-commercial sectors
at CFTC has stayed near its recent high, the pace of the USD/JPY change
may slow.
Furthermore, governmental officials may intervene in
the market verbally, but not in reality. Though there is almost no
reasoning that would lead to a G7 consensus in favor of Japanese
currency intervention, market expectations of such intervention could
grow, because real flows, especially the current account surplus, the
JPY real interest rate rise, and weak confidence in QQE with a negative
interest rate might support the USD/JPY drop on the fundamentals side."
(Market News Provided by FXstreet)
