10 Jun 2013
Flash: The BOJ - what next? - Societe Generale
FXstreet.com (Barcelona) - Kit Juckes, Global Head of Currency Strategy feels that if he thought that we were in for calmer times across markets, I would be very, very sorely tempted to come over all yen bearish again, right here and right now.
He begins by asking, “Was USD/JPY 95 the low for a mini-cycle?” He notes that the BOJ meeting tomorrow is one of several highlights this week (the German Constitutional Court on Wednesday, Australian employment data Thursday and US retail sales and industrial production data later in the week are others). He writes, “I doubt they will do much, since the overall moves in NKY and JPY, not to mention the recent better data (today's decent current account and upward revision to GDP for example) suggest Abenomics is going pretty well.” The problem that he sees is of course, the volatility in NKY, JGBs and more recently in the yen. He feels that the best way of calming that is to remain dovish but not to over-rock the boat, as the risk is that this isn't enough to offset global turmoil. He writes, “So.... I ‘hope' we've seen the low in USD/JPY but I don't really believe it and Alvin Tan (colleague) is recommending staying short in EUR/JPY. Watching brief remains.”
He begins by asking, “Was USD/JPY 95 the low for a mini-cycle?” He notes that the BOJ meeting tomorrow is one of several highlights this week (the German Constitutional Court on Wednesday, Australian employment data Thursday and US retail sales and industrial production data later in the week are others). He writes, “I doubt they will do much, since the overall moves in NKY and JPY, not to mention the recent better data (today's decent current account and upward revision to GDP for example) suggest Abenomics is going pretty well.” The problem that he sees is of course, the volatility in NKY, JGBs and more recently in the yen. He feels that the best way of calming that is to remain dovish but not to over-rock the boat, as the risk is that this isn't enough to offset global turmoil. He writes, “So.... I ‘hope' we've seen the low in USD/JPY but I don't really believe it and Alvin Tan (colleague) is recommending staying short in EUR/JPY. Watching brief remains.”