11 Dec 2013
Flash: USD/JPY projected circa 106.00 by Q4 2014 - JPMorgan
FXstreet.com (Bali) - One of JP Morgan's highest-conviction views for 2014 is USD strength versus JPY, with a 2014 Q4 target of 106.00.
Key Quotes
"BoJ and Fed policy will diverge for a second consecutive year through Fed tapering in January and BoJ easing in April, extending the most powerful long-term driver of USD/JPY (chart 20). Two balance of payments dynamics are worth monitoring, both yen-negative."
"FDI outflows from Japanese corporate is on track to reach a record high in 2013 despite massive yen depreciation."
"Also, Japanese investors may finally rotate into foreign assets, having ironically been net sellers in 2013 for the first time in history. But with the macro community quite short already, the explosive, high-volatility phase of yen weakness has passed."
Key Quotes
"BoJ and Fed policy will diverge for a second consecutive year through Fed tapering in January and BoJ easing in April, extending the most powerful long-term driver of USD/JPY (chart 20). Two balance of payments dynamics are worth monitoring, both yen-negative."
"FDI outflows from Japanese corporate is on track to reach a record high in 2013 despite massive yen depreciation."
"Also, Japanese investors may finally rotate into foreign assets, having ironically been net sellers in 2013 for the first time in history. But with the macro community quite short already, the explosive, high-volatility phase of yen weakness has passed."