27 Feb 2015
USD/JPY maintains the range, upside move possible as risk aversion falls – Scotiabank
FXStreet (Barcelona) - Camilla Sutton CFA, CMT, Chief FX Strategist at Scotiabank, reviews the Japanese data releases and warns of a further easing by the BoJ, and further predicts USD/JPY to break out of its broader range as volatility and risk aversion falls lower across markets.
Key Quotes
“JPY is flat but still trading within its broader range, just above its 50‐day MA of 118.80. Data flow was disappointing, as inflation came in at 2.4% on headline, 2.2% ex fresh food and 2.1% ex food and energy; trending lower and still artificially elevated from the consumption tax increase.”
“The jobless rate rose unexpectedly to 3.6%, household spending collapsed down to –5.1%, retail sales disappointed, falling –2.0%y/y while housing starts were down –13%; the only bright spot was a 4%m/m rise in industrial production.”
“Governor Kuroda followed up, repeating comments that they expect to meet the BoJ’s CPI target (ex impact of inflation).”
“The deterioration in the fundamental data is concerning and warns of the potential for further BoJ policy action.”
“As volatility and risk aversion falls lower across markets, we expect USDJPY to break out of its recent narrow range towards the December highs of 121.85.”
Key Quotes
“JPY is flat but still trading within its broader range, just above its 50‐day MA of 118.80. Data flow was disappointing, as inflation came in at 2.4% on headline, 2.2% ex fresh food and 2.1% ex food and energy; trending lower and still artificially elevated from the consumption tax increase.”
“The jobless rate rose unexpectedly to 3.6%, household spending collapsed down to –5.1%, retail sales disappointed, falling –2.0%y/y while housing starts were down –13%; the only bright spot was a 4%m/m rise in industrial production.”
“Governor Kuroda followed up, repeating comments that they expect to meet the BoJ’s CPI target (ex impact of inflation).”
“The deterioration in the fundamental data is concerning and warns of the potential for further BoJ policy action.”
“As volatility and risk aversion falls lower across markets, we expect USDJPY to break out of its recent narrow range towards the December highs of 121.85.”