24 Jun 2013
Flash: USD/JPY needs to be above 99 to boost bull confidence - BBH
FXstreet.com (Barcelona) - Marc Chandler, Global Head of Currency Strategy at Brown Brothers Harriman notes that between late May and mid-June, the dollar surrendered a little more than a third of the gains it had registered against the yen in the Abe-inspired rally.
He sees that it had been basing near, though below, his objective of JPY95 before the FOMC meeting, but unlike in late May, however, Japanese government bonds were largely stable in the face of the sharp backing up of US yields. He adds that the 10-year spread jumped to 165 bp at the end of the week from 130 bp at the prior week's end, which is nearly a 2-year high. and coincided with the dollar's recovery to a little above JPY98. He finishes by writing, “The dollar has tested its 20-day moving average for the first time this month. The dollar needs to resurface the JPY99-JPY100 area to boost the confidence of the bulls that new highs can be seen.”
He sees that it had been basing near, though below, his objective of JPY95 before the FOMC meeting, but unlike in late May, however, Japanese government bonds were largely stable in the face of the sharp backing up of US yields. He adds that the 10-year spread jumped to 165 bp at the end of the week from 130 bp at the prior week's end, which is nearly a 2-year high. and coincided with the dollar's recovery to a little above JPY98. He finishes by writing, “The dollar has tested its 20-day moving average for the first time this month. The dollar needs to resurface the JPY99-JPY100 area to boost the confidence of the bulls that new highs can be seen.”