JPY Could Appreciate Further – Danske Bank
Chief Analyst at Danske Bank Arne Rasmussen has assessed the prospects of further strengthening by the Japanese currency.
Key Quotes
“The
hottest topic in global FX markets is the relentless strength of the
JPY. As we argued in Friday’s strategy piece, there is not much that can
stop the strength of the JPY near term with the Bank of Japan (BoJ)
meeting only coming up at the end of April”.
“The natural gravity for USD/JPY is lower as the JPY
is undervalued and Japan runs a large current account surplus, like
Europe. The threat of FX intervention from the Japanese authorities may
not be credible as Japan will likely not have the support of the other
G7 members”.
“When Japan intervened in the FX markets in 2011,
USD/JPY was trading below 80 and the coordinated intervention on 18
March that year came one week after the Fukushima nuclear disaster”.
“Japan is unlikely to face the same kind of support for FX intervention this time around. Near term, USD/JPY is likely to test lower levels where 105 is the key near-term psychological support level”.
(Market News Provided by FXstreet)
