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9 Oct 2013
Flash: Current level of USD/JPY is attractive for fresh longs - Nomura
FXstreet.com (Barcelona) - One of the main take-away from the latest Nomura survey on USD/JPY is the lowered expectations for the exchange rate to appreciate as much as one month ago, mainly due to uncertainties on US fiscal situation and expectations for slower timing of Feds’ tapering.
Key Quotes
"USDJPY may face downside pressures from US debt ceiling discussions in the near future, but US events will be positive for USDJPY gradually, as we expect US to avoid default and the Fed to start tapering in December.
"In addition, we judge Japan oriented flow, both corporate and investor flow, still points further upside of USDJPY. Our survey confirmed that Japanese players still see upside for USDJPY toward next year, suggesting foreign investment is going to accelerate."
In the short term, uncertainties caused by US debt ceiling discussions will put downside pressure on USDJPY, and we are not ready for initiating fresh USDJPY long positions yet. However, we view JPY as an attractive funding currency now and going forward. We keep recommending GBPJPY longs. Once US fiscal situation gets clearer, current level of USDJPY is attractive for fresh USDJPY long positions."
Key Quotes
"USDJPY may face downside pressures from US debt ceiling discussions in the near future, but US events will be positive for USDJPY gradually, as we expect US to avoid default and the Fed to start tapering in December.
"In addition, we judge Japan oriented flow, both corporate and investor flow, still points further upside of USDJPY. Our survey confirmed that Japanese players still see upside for USDJPY toward next year, suggesting foreign investment is going to accelerate."
In the short term, uncertainties caused by US debt ceiling discussions will put downside pressure on USDJPY, and we are not ready for initiating fresh USDJPY long positions yet. However, we view JPY as an attractive funding currency now and going forward. We keep recommending GBPJPY longs. Once US fiscal situation gets clearer, current level of USDJPY is attractive for fresh USDJPY long positions."