USD/JPY Limited Downside? – Rabobank
Senior FX Strategist at Rabobank Jane Foley, has hinted at the likeliness that JPY could have less room to extend.
Key Quotes
“Despite recent speculation that Japan’s MoF could be poised to order the BoJ
to intervene, we would expect that this is unlikely since it would be
seen as a blatant act of currency war which would potentially draw
criticism from the US and other G7 nations”.
“While we see a
fairly small risk of intervention, the chances of more BoJ policy
accomodation this spring have been enhanced. Since the huge QQE
programme has already depleted JGB supply, speculation is rising that
the BoJ will increase involvement in other asset classes. Assuming risk
appetite holds, this talk may help fend off further yen gains for now. USD/JPY should also find support on signs of oversold technical indicators”.
