27 Apr 2015
USD/JPY might climb towards 126, 12M view – Rabobank
FXStreet (Barcelona) - Japanese Yen risks further depreciation as BoJ might announce further policy changes by year-end, explains Jane Foley, Senior Currency Strategist at Rabobank, and further forecasts USD/JPY to move towards 126 over the next 12 months.
Key Quotes
“Last October the BoJ shocked the market with an increase in its QQE plan. Investors has been blindsided by the BoJ’s insistence that policy was on track.”
“If Kuroda is maintaining his upbeat assessment in the economy with the aim of supporting inflation expectations, there is a risk that the market can be blind-sided by a policy announcement again. Back in October the impact of BoJ’s surprise decision on USD/JPY was amplified because it coincided with the end of the Fed’s QE policy.”
“Given our expectation that the BoJ will announce further policy measures this year and that the Fed is likely to hike interest during 2015 (although we do not expect the Fed to hike until December, we see potential for USD/JPY to move towards 126 on a 12 mth view.”
Key Quotes
“Last October the BoJ shocked the market with an increase in its QQE plan. Investors has been blindsided by the BoJ’s insistence that policy was on track.”
“If Kuroda is maintaining his upbeat assessment in the economy with the aim of supporting inflation expectations, there is a risk that the market can be blind-sided by a policy announcement again. Back in October the impact of BoJ’s surprise decision on USD/JPY was amplified because it coincided with the end of the Fed’s QE policy.”
“Given our expectation that the BoJ will announce further policy measures this year and that the Fed is likely to hike interest during 2015 (although we do not expect the Fed to hike until December, we see potential for USD/JPY to move towards 126 on a 12 mth view.”