11 Jun 2015
USD/JPY: Cautious for further Yen weakness – BTMU
FXStreet (Barcelona) - Lee Hardman, Currency Analyst at Bank of Tokyo-Mitsubishi UFJ, maintains a cautious outlook on USD/JPY, and expects any Yen depreciation to be more gradual.
Key Quotes
“The yen has weakened modestly in the Asian trading session partially reversing sharp gains recorded yesterday after comments from BoJ Governor Kuroda on the yen triggered a short squeeze. The importance of BoJ Governor Kuroda’s comments from yesterday stating that “given the real effective exchange rate has come this far, a further fall seems unlikely” have been downplayed.”
“Japanese Economy Minister Amari told reporters that BoJ Governor Kuroda stated before a meeting of Japan’s Economic and Fiscal Policy Council that he didn’t intend to move markets with his earlier comments on the yen.”
“At face value the comments from Governor Kuroda highlighted that the yen has already weakened very sharply since the end of 2012 becoming increasingly and deeply undervalued. The nominal trade-weighted yen is only within 3.0% of its low from prior to the global financial crisis in June 2007. It is one of the key reasons why we are also cautious over the scope for further yen weakness which we expect to be more gradual.”
“Any support for the yen from official rhetoric will likely be dampened by the negative impact of the BoJ’s ongoing aggressive monetary easing, both of which do not appear consistent.”
Key Quotes
“The yen has weakened modestly in the Asian trading session partially reversing sharp gains recorded yesterday after comments from BoJ Governor Kuroda on the yen triggered a short squeeze. The importance of BoJ Governor Kuroda’s comments from yesterday stating that “given the real effective exchange rate has come this far, a further fall seems unlikely” have been downplayed.”
“Japanese Economy Minister Amari told reporters that BoJ Governor Kuroda stated before a meeting of Japan’s Economic and Fiscal Policy Council that he didn’t intend to move markets with his earlier comments on the yen.”
“At face value the comments from Governor Kuroda highlighted that the yen has already weakened very sharply since the end of 2012 becoming increasingly and deeply undervalued. The nominal trade-weighted yen is only within 3.0% of its low from prior to the global financial crisis in June 2007. It is one of the key reasons why we are also cautious over the scope for further yen weakness which we expect to be more gradual.”
“Any support for the yen from official rhetoric will likely be dampened by the negative impact of the BoJ’s ongoing aggressive monetary easing, both of which do not appear consistent.”