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17 Feb 2014
Flash: USD/JPY rebound to be modest for now – BTMU
FXStreet (Barcelona) - Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ, observes that the USD/JPY is outperforming its other JPY crosses today.
Key Quotes
"The yen continues to gradually weaken reversing its safe haven driven gains recorded earlier this year. Investor concerns over the negative impact upon global growth from recent developments in emerging markets continue to ease as most evident by the Turkish lira and South African rand having now almost fully reversed their sharp sell offs since mid-January."
"The reversals for other emerging market currencies such as the Russian rouble, Chilean peso and Hungarian forint have been less impressive. The temporary economic slowdown in the US in Q1 following very robust growth in the second half of last year is also weighing modestly upon the US dollar in the near-term and boosting investor risk sentiment by increasing the likelihood that the Fed may consider slowing the pace of QE tapering."
"As a result the USD/JPY rebound is proving more modest than that of other yen crosses such as GBP/JPY. We still expect the Fed to continue with the current pace of QE tapering unless more marked US economic weakness continues into Q2."
Key Quotes
"The yen continues to gradually weaken reversing its safe haven driven gains recorded earlier this year. Investor concerns over the negative impact upon global growth from recent developments in emerging markets continue to ease as most evident by the Turkish lira and South African rand having now almost fully reversed their sharp sell offs since mid-January."
"The reversals for other emerging market currencies such as the Russian rouble, Chilean peso and Hungarian forint have been less impressive. The temporary economic slowdown in the US in Q1 following very robust growth in the second half of last year is also weighing modestly upon the US dollar in the near-term and boosting investor risk sentiment by increasing the likelihood that the Fed may consider slowing the pace of QE tapering."
"As a result the USD/JPY rebound is proving more modest than that of other yen crosses such as GBP/JPY. We still expect the Fed to continue with the current pace of QE tapering unless more marked US economic weakness continues into Q2."