2 Dec 2014
JPY has overshot, can disappoint USD bulls in 2015 - DB
FXStreet (Barcelona) - According to The Deutsche Bank Research Team, the USD bulls can be disappointed in 2015 as JPY has overshot, as it stands near 30% above its PPP fair value.
Key Quotes
“JPY has overshot especially given the recent oil related improvement in terms of trade. US/JPY is near 30% above PPP ‘fair value’ metrics when 20% normally represents an overshoot and a potential reversal signal.”
“This goes with the view that the yen is likely to slowly lose its status as the leading edge of the strong USD trend. USD/JPY will only however show clearly signs of slowing if Japan’s export sector and trade balance turns and FEER models support the BEER and PPP signals of an overshoot”.
Key Quotes
“JPY has overshot especially given the recent oil related improvement in terms of trade. US/JPY is near 30% above PPP ‘fair value’ metrics when 20% normally represents an overshoot and a potential reversal signal.”
“This goes with the view that the yen is likely to slowly lose its status as the leading edge of the strong USD trend. USD/JPY will only however show clearly signs of slowing if Japan’s export sector and trade balance turns and FEER models support the BEER and PPP signals of an overshoot”.