4 Sep 2013
Flash: JPY weakness to continue even with a quiet BOJ - Nomura
FXstreet.com (Barcelona) - The fact that the BOJ has been quiet since introducing the QE program back in April should not be reason for disappointment to those investors expecting more active easing, says FX Strategist Yujiro Goto, who still foresses further Yen weakness.
Key Quotes
"The gradual rise in inflation expectations, with low nominal yields anchored by increasing confidence in the BOJ, should sustain JPY weakness further."
"BOJ Deputy Governor Iwata last week said that “QQE is still in its early stages, and I hope you will be patient enough to see its effects permeate the economy.” This is also true for USDJPY trading."
"We expect the BOJ to leave policy unchanged for the time being and BOJ meetings will not be an event, from a short-term JPY trading perspective. Nonetheless, a quiet BOJ at this point clearly suggests to us that the Japanese economy is now freed from premature BOJ tightening and has been trimming opportunities for JPY to weaken."
Key Quotes
"The gradual rise in inflation expectations, with low nominal yields anchored by increasing confidence in the BOJ, should sustain JPY weakness further."
"BOJ Deputy Governor Iwata last week said that “QQE is still in its early stages, and I hope you will be patient enough to see its effects permeate the economy.” This is also true for USDJPY trading."
"We expect the BOJ to leave policy unchanged for the time being and BOJ meetings will not be an event, from a short-term JPY trading perspective. Nonetheless, a quiet BOJ at this point clearly suggests to us that the Japanese economy is now freed from premature BOJ tightening and has been trimming opportunities for JPY to weaken."