10 Aug 2015
Kuroda comfortable with Yen at 125 - Nomura
FXStreet (Guatemala) - Analysts at Nomura explained that the Governor Kuroda recently maintained his balanced view on the impact of JPY weakness on the economy, even though USD/JPY is again approaching 125.
Key Quotes:
"He said a weak JPY helps exporters and global companies, while JPY weakness also helps boost equity prices. JPY weakness has a negative impact on importers and households, in his view. Governor Kuroda declined to comment on the level and speed of FX changes, while repeating that the currency is good for the economy if it reflects economic fundamentals, and it is desirable for FX to move in a stable manner."
"In addition, Governor Kuroda also repeated that his comments on JPY REER in parliament in June were not relevant to the BOJ’s USDJPY view, suggesting there is not a specific level of USD/JPY that the BOJ would judge too weak
"Given Governor Kuroda’s neutral comments on the recent JPY weakness, we do not expect the BOJ to react negatively to USD/JPY appreciating above 125 when key nearterm US data are strong. We do not expect the BOJ to ease anytime soon, but upside room for USD/JPY is now increasing, in our view."
Key Quotes:
"He said a weak JPY helps exporters and global companies, while JPY weakness also helps boost equity prices. JPY weakness has a negative impact on importers and households, in his view. Governor Kuroda declined to comment on the level and speed of FX changes, while repeating that the currency is good for the economy if it reflects economic fundamentals, and it is desirable for FX to move in a stable manner."
"In addition, Governor Kuroda also repeated that his comments on JPY REER in parliament in June were not relevant to the BOJ’s USDJPY view, suggesting there is not a specific level of USD/JPY that the BOJ would judge too weak
"Given Governor Kuroda’s neutral comments on the recent JPY weakness, we do not expect the BOJ to react negatively to USD/JPY appreciating above 125 when key nearterm US data are strong. We do not expect the BOJ to ease anytime soon, but upside room for USD/JPY is now increasing, in our view."