8 Apr 2015
Short JPY shrinks, USD/JPY at 125.00 in 3-month – Danske Bank
FXStreet (Edinburgh) - In the opinion of analysts at Danske Bank, the pair could reach 125.00 in a 3-month horizon despite JPY short positioning keeps decreasing.
Key Quotes
“IMM positioning data released on Friday revealed that investors slashed their bearish JPY bets, sending non-commercial positioning to the 44th percentile - the least bearish level since October 2012”.
“From a historical perspective, last week’s move was very aggressive as it was the largest single week’s net short covering in 18 months”.
“While positioning suggests reduced investor belief in a higher USD/JPY, we still fundamentally expect the cross to move higher on the relative monetary policy differential”.
“Although recent US data has surprised to the downside – partly due to temporary weather effects - we still expect the Fed to hike rates in September”.
“Historically, this has lifted USD rates in the months prior to lift-off, which we again expect to boost the USD in the coming months”.
Key Quotes
“IMM positioning data released on Friday revealed that investors slashed their bearish JPY bets, sending non-commercial positioning to the 44th percentile - the least bearish level since October 2012”.
“From a historical perspective, last week’s move was very aggressive as it was the largest single week’s net short covering in 18 months”.
“While positioning suggests reduced investor belief in a higher USD/JPY, we still fundamentally expect the cross to move higher on the relative monetary policy differential”.
“Although recent US data has surprised to the downside – partly due to temporary weather effects - we still expect the Fed to hike rates in September”.
“Historically, this has lifted USD rates in the months prior to lift-off, which we again expect to boost the USD in the coming months”.