10 Feb 2015
Inflation expectations supporting USD/JPY – BTMU
FXStreet (Edinburgh) - Japan Strategist at BTMU T.Sekido sustains that inflation expectations could be behind the current levels of spot.
Key Quotes
“Our estimated USD/JPY is still near the JPY100 level based on the real yield gap between the US and Japan, even as USD/JPY hovers between JPY115-120”.
“The USD-JPY gap and the estimate thereof may reflect market inflation expectations, or ‘reflation.’
“The recent gap between our estimation and USD/JPY may be partly considered the market expectation”.
“In other words, the present USD/JPY level is being supported by market inflation expectations, not the US-Japan yield gap”.
Key Quotes
“Our estimated USD/JPY is still near the JPY100 level based on the real yield gap between the US and Japan, even as USD/JPY hovers between JPY115-120”.
“The USD-JPY gap and the estimate thereof may reflect market inflation expectations, or ‘reflation.’
“The recent gap between our estimation and USD/JPY may be partly considered the market expectation”.
“In other words, the present USD/JPY level is being supported by market inflation expectations, not the US-Japan yield gap”.