The USD/JPY faces downside risk to below 77 and the possibility of currency intervention could grow once it breaches that level, Citibank Japan chief strategist Osamu Takashima says in a note. The Fed's decision to launch a new round of bond buying has improved risk appetite, causing an across-the-board weakness in the USD, he adds. Meanwhile, a recovery in risk appetite should work in favor of JPY sales, and overseas short-term speculators appear to be starting to build up fresh JPY shorts, he adds. A rise in oil and commodity prices could be also be negative for the JPY as it could worsen Japan's current account balance, Takashima adds. The pair is at 77.63, from 77.48 in late New York Thursday.
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