29 Jan 2015
JPY buying might cap USD/JPY in Q1 2015 – BTMU
FXStreet (Barcelona) - According to Lee Hardman, Currency Analyst at Bank of Tokyo-Mitsubishi UFJ, JPY buying might pick up soon as short-term JGB yields have mostly normalised, which might cap USD/JPY’s upside in Q1 2015.
Key Quotes
“The recent JGB rally has been a surprise. The key factor may be the Bank of Japan’s February purchase plans, to be released soon. BoJ purchases may slow the pace of rise for long-dated JGB yields. Volatility may remain high next week ahead of the 30Yr JGB auction.“
“Before that, 3Yr – 5Yr JGB yields moved back into positive territory. Short-term JGB yields have mostly normalized, and this may support a JPY appreciation as the US Treasury – JGB yield gap narrows. JPY buying may pick up soon.”
“Japanese institutional investors will likely keep buying foreign securities. Japanese pensions and insurance companies will continue to watch for attractive opportunities in rebalancing their portfolios.”
“Japanese non-manufacturers will likely continue to diversify their business portfolios and sell JPY. However, JGB flows and rates have changed.”
“We think that JPY buying will likely cap USD/JPY in 1Q 2015.”
Key Quotes
“The recent JGB rally has been a surprise. The key factor may be the Bank of Japan’s February purchase plans, to be released soon. BoJ purchases may slow the pace of rise for long-dated JGB yields. Volatility may remain high next week ahead of the 30Yr JGB auction.“
“Before that, 3Yr – 5Yr JGB yields moved back into positive territory. Short-term JGB yields have mostly normalized, and this may support a JPY appreciation as the US Treasury – JGB yield gap narrows. JPY buying may pick up soon.”
“Japanese institutional investors will likely keep buying foreign securities. Japanese pensions and insurance companies will continue to watch for attractive opportunities in rebalancing their portfolios.”
“Japanese non-manufacturers will likely continue to diversify their business portfolios and sell JPY. However, JGB flows and rates have changed.”
“We think that JPY buying will likely cap USD/JPY in 1Q 2015.”