26 May 2015
JPY downside opening up – RBS
FXStreet (Barcelona) - Greg Gibbs of RBS, sees further downside risks for the JPY against the dollar and the EM FX.
Key Quotes
“BoJ QE policy has appeared to boost domestic asset prices and keep JPY capped in the year to date. Over the rest of the year we expect the QE to spill over to a weaker exchange rate again. But much depends on the outlook for US policy.”
“We believe that the JPY will remain relatively stable in the near term, but there is little to be lost maintaining a short position, preparing for a time when USD resumes its rally.”
“Rising long-end US Treasury yields are positives correlated with USD/JPY. RBS US Rates Desk Strategy Team believes there is potential for further gains.”
“We also see JPY underperforming EM currencies if the market resumes its search for yield as indeed looks more likely if the US delays its policy hikes.”
Key Quotes
“BoJ QE policy has appeared to boost domestic asset prices and keep JPY capped in the year to date. Over the rest of the year we expect the QE to spill over to a weaker exchange rate again. But much depends on the outlook for US policy.”
“We believe that the JPY will remain relatively stable in the near term, but there is little to be lost maintaining a short position, preparing for a time when USD resumes its rally.”
“Rising long-end US Treasury yields are positives correlated with USD/JPY. RBS US Rates Desk Strategy Team believes there is potential for further gains.”
“We also see JPY underperforming EM currencies if the market resumes its search for yield as indeed looks more likely if the US delays its policy hikes.”