USD/JPY unlikely to hold
Monday, October 31, 2011
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The USD/JPY surged after the BoJ intervened in the markets to weaken the Yen. The pair jumped from 75.60 to 79.50 but currently is trading around 78.00. Actions implemented by Japanese authorities shocked markets. “Today markets are likely to focus on the aftermath of the unilateral BoJ intervention which unlike the moves by the SNB did not target a specific level,” the Brown Brothers Harriman Global Currency Strategy Team wrote. They see that current levels are unlikely to hold, pointing out that given the market initial response, “we doubt a one-off unilateral is unlikely to work for long.”
Analysts at BBH mentioned that the timing chosen was orchestrated quite well by catching the market off guard and stealing headlines, ahead of a busy week, that includes the G20 Summit.
“Overall, despite the action taken by Japanese authorities we expect the underlying fundamentals to remain the driver of yen strength, notably demand for safe havens and reluctance by the Japanese to recycle its external balance, leading to the yen to retest levels near 76,” analysts concluded.
Source : fxstreet.com
Analysts at BBH mentioned that the timing chosen was orchestrated quite well by catching the market off guard and stealing headlines, ahead of a busy week, that includes the G20 Summit.
“Overall, despite the action taken by Japanese authorities we expect the underlying fundamentals to remain the driver of yen strength, notably demand for safe havens and reluctance by the Japanese to recycle its external balance, leading to the yen to retest levels near 76,” analysts concluded.
Source : fxstreet.com
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