5 Jun 2015
BoJ easing ahead might take USD/JPY towards 130 – SG
FXStreet (Barcelona) - The Team at Societe Generale, believes that BoJ might continue its easing policy and take USD/JPY towards 130.
Key Quotes
“The yen is cheap enough to make Japan competitive. But as inflation drifts back down, industrial output stagnates, and with real consumer spending running at an annual rate of 0.3% since PM Abe took power, where will the currency head next? Japan’s exports have grown more slowly since 2012 than the US’s in real terms, even if a 50% rise in USD/JPY has done wonders for exporters’ profits. Our best guess is that the BoJ will stop talking about a weaker yen but will maintain its super-easy policy stance for long enough to take USD/JPY to 130, but not to 150. It’s all about conviction.”
Key Quotes
“The yen is cheap enough to make Japan competitive. But as inflation drifts back down, industrial output stagnates, and with real consumer spending running at an annual rate of 0.3% since PM Abe took power, where will the currency head next? Japan’s exports have grown more slowly since 2012 than the US’s in real terms, even if a 50% rise in USD/JPY has done wonders for exporters’ profits. Our best guess is that the BoJ will stop talking about a weaker yen but will maintain its super-easy policy stance for long enough to take USD/JPY to 130, but not to 150. It’s all about conviction.”