16 Jun 2014
JPY remains well supported - BTMU
FXStreet (Barcelona) - Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ, observes the Japanese Currency remains on a firm tone.
Key Quotes
"The yen has strengthened modestly in the Asian trading session with USD/JPY falling back towards key technical support from its 200-day moving average at just above 101.60. USD/JPY has not traded below its 200-day moving average on a sustained basis since late 2012 prior to the sharp Abenomics driven weakening of the yen."
"The pick up in geopolitical risks related to social unrest in Iraq has resulted in more risk-averse trading conditions in the near-term supporting the yen. The oil market has moved to price in a wider risk premium to reflect the heightened risk of a potential disruption to supply with the price of Brent crude oil having increased by around USD3/barrel since late last week. The higher price of crude oil in the near-term should also prove supportive for currencies from oil producing countries such as the Canadian dollar, Norwegian krone, and Russian rouble."
"The modest strengthening of the yen overnight has contributed to the underperformance of the Japanese equity market with the Nikkei 225 index declining by around 1.0%. It follows the announcement on Friday from Japanese Prime Minister Abe that the government has decided to lower the corporate tax rate from its current rate of 35% down to below 30% within a few years."
"The corporate tax cuts will begin from FY 2015. The government has also agreed to find offsetting measures to help neutralise the impact of corporate tax cuts on Japan’s budget balance."
Key Quotes
"The yen has strengthened modestly in the Asian trading session with USD/JPY falling back towards key technical support from its 200-day moving average at just above 101.60. USD/JPY has not traded below its 200-day moving average on a sustained basis since late 2012 prior to the sharp Abenomics driven weakening of the yen."
"The pick up in geopolitical risks related to social unrest in Iraq has resulted in more risk-averse trading conditions in the near-term supporting the yen. The oil market has moved to price in a wider risk premium to reflect the heightened risk of a potential disruption to supply with the price of Brent crude oil having increased by around USD3/barrel since late last week. The higher price of crude oil in the near-term should also prove supportive for currencies from oil producing countries such as the Canadian dollar, Norwegian krone, and Russian rouble."
"The modest strengthening of the yen overnight has contributed to the underperformance of the Japanese equity market with the Nikkei 225 index declining by around 1.0%. It follows the announcement on Friday from Japanese Prime Minister Abe that the government has decided to lower the corporate tax rate from its current rate of 35% down to below 30% within a few years."
"The corporate tax cuts will begin from FY 2015. The government has also agreed to find offsetting measures to help neutralise the impact of corporate tax cuts on Japan’s budget balance."