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3 Mar 2015
Further weakness on the cards for JPY – BAML
FXStreet (Edinburgh) - The Japanese currency could face further weakness in the upcoming periods, remarked analysts at BAML.
Key Quotes
“Based on our cost/benefit analysis of monetary policy, we continue to expect the BoJ to maintain its QQE policy this year and policy bias is still tilted to further easing, leading to lower JGB yields despite the recent volatile movement”.
“In our view, there is a scope for the market to price in further policy divergence between the Fed and BoJ this year”.
“A stable Abe-Kuroda reflation tag should promote policies to lower real interest rates and improve investor sentiment, which will incentivize domestic investors to sell JPY”.
“Despite JPY’s undervaluation and some improvement in the current account balance expected in 2015, we continue to expect the BoJ’s easy policy to weaken the yen, albeit gradually. We forecast USD/JPY at 123 at end-2015”.
Key Quotes
“Based on our cost/benefit analysis of monetary policy, we continue to expect the BoJ to maintain its QQE policy this year and policy bias is still tilted to further easing, leading to lower JGB yields despite the recent volatile movement”.
“In our view, there is a scope for the market to price in further policy divergence between the Fed and BoJ this year”.
“A stable Abe-Kuroda reflation tag should promote policies to lower real interest rates and improve investor sentiment, which will incentivize domestic investors to sell JPY”.
“Despite JPY’s undervaluation and some improvement in the current account balance expected in 2015, we continue to expect the BoJ’s easy policy to weaken the yen, albeit gradually. We forecast USD/JPY at 123 at end-2015”.