11 Feb 2015
Maintain USD/JPY long exposure - Nomura
FXStreet (Bali) - The Nomura FX Strategy Team notes that the flow picture remains JPY negative, with the bank endorsing USD/JPY longs, saying it remain an attractive option.
Key Quotes
"USD/JPY has performed strongly since the stronger-than-expected US nonfarm payrolls (NFP) last Friday. USD/JPY has tested 119.50 today, as USD yields have maintained a strong upside momentum since the US payroll data. The strong job number and the rise in wages in the US suggest that the possibility of a Fed rate hike in June cannot be ruled out. Thus, the March FOMC meeting remains a possible important broad-based USD bull event, as the Fed could drop its “patient” expression then."
"As of last Tuesday JPY short positions decreased to the smallest amount since Abenomics began, while Japanese margin traders also took profits aggressively on their USD/JPY long positions after the US NFP. Because of USD/JPY high sensitivity to USD yields and much lighter positioning, JPY short positions remain attractive as a currency to short against USD, in our view."
Key Quotes
"USD/JPY has performed strongly since the stronger-than-expected US nonfarm payrolls (NFP) last Friday. USD/JPY has tested 119.50 today, as USD yields have maintained a strong upside momentum since the US payroll data. The strong job number and the rise in wages in the US suggest that the possibility of a Fed rate hike in June cannot be ruled out. Thus, the March FOMC meeting remains a possible important broad-based USD bull event, as the Fed could drop its “patient” expression then."
"As of last Tuesday JPY short positions decreased to the smallest amount since Abenomics began, while Japanese margin traders also took profits aggressively on their USD/JPY long positions after the US NFP. Because of USD/JPY high sensitivity to USD yields and much lighter positioning, JPY short positions remain attractive as a currency to short against USD, in our view."