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19 Feb 2014
Flash: Keep trading JPY from short side - Nomura
FXStreet (Bali) - According to Nomura FX Strategists, weakness in the USD/JPY is set to continue beyond US data disappointment.
Key Quotes
"USDJPY has been weak since the beginning of the year. We judge large part of recent weakness in USDJPY is due to weaker than expected US economic data."
"Higher volatilities in EM currency and fixed income markets also have likely encouraged foreign investors to unwind their JPY short positions. In fact, speculative JPY short positions at IMM have nearly halved from the recent peak."
"Key Japan factors behind our JPY weakness forecast remains intact. Japan oriented flows, including corporate and investor flows, remain JPY negative."
"Lower expectations for early BOJ easing decrease the downside risk of USDJPY, as partly evidenced by impressive price action after the BOJ meeting today."
"The near term momentum of JPY weakness may be lacklustre due to weak US economic data. However, we expect JPY weakness to continue in 2014 and keep recommending trading JPY from short side."
Key Quotes
"USDJPY has been weak since the beginning of the year. We judge large part of recent weakness in USDJPY is due to weaker than expected US economic data."
"Higher volatilities in EM currency and fixed income markets also have likely encouraged foreign investors to unwind their JPY short positions. In fact, speculative JPY short positions at IMM have nearly halved from the recent peak."
"Key Japan factors behind our JPY weakness forecast remains intact. Japan oriented flows, including corporate and investor flows, remain JPY negative."
"Lower expectations for early BOJ easing decrease the downside risk of USDJPY, as partly evidenced by impressive price action after the BOJ meeting today."
"The near term momentum of JPY weakness may be lacklustre due to weak US economic data. However, we expect JPY weakness to continue in 2014 and keep recommending trading JPY from short side."