JPY: Strong Q1 GDP driving lower – SocGen

In view of Kit Juckes, Research Analyst at Societe Generale, the most idiosyncratic currency in the world is still the yen, where strong Q1 GDP data (2.2% SAAR) have seen the currency lose ½%.

Key Quotes

“The deflator has fallen further into negative territory (- 0.8% y/y). Unusually, the upshot is a weaker yen on a day when the Nikkei is falling, but that does suggest the equity market is playing catch-up with the S&P index while the market is already looking ahead. The more I fear that the peak in US yields will be lower than we expect, the more i doubt that we will get to the USD/JPY 120-125 peak we are forecasting, but short yen strategies will go on working. EUR/JPY is back just below 124 but still looks set for 130-140.”