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20 Aug 2013
Flash: USD/JPY held back by Nikkei woes? – Westpac
FXstreet.com (New York) - Global FX Strategist Sean Callow at Westpac outlines the short-term outlook of the USD/JPY.
Key quotes
“The Illiquid Tokyo markets have amplified a USD/JPY day-to-day churn, with anywhere from 96.00 to 98.60 fair game near-term.”
“US data flow has added to the choppy trade, given the pair’s sensitivity to yield spreads. The breakout in US yields suggests buying dips is still the best approach, with backing from an acceleration in Japan’s outflows to foreign bonds.”
However, “fear of LDP backsliding on reform is keeping the Nikkei on edge and thus limiting gains.”
Key quotes
“The Illiquid Tokyo markets have amplified a USD/JPY day-to-day churn, with anywhere from 96.00 to 98.60 fair game near-term.”
“US data flow has added to the choppy trade, given the pair’s sensitivity to yield spreads. The breakout in US yields suggests buying dips is still the best approach, with backing from an acceleration in Japan’s outflows to foreign bonds.”
However, “fear of LDP backsliding on reform is keeping the Nikkei on edge and thus limiting gains.”