31 Jul 2015
USD/JPY: little hope for sustained upside - BTMU
FXStreet (Guatemala) - Derek Halpenny, analyst at The Bank of Tokyo Mitsubishi UFJ explained that the FOMC statement gave little away in regard to an explicit hint of a rate increase in September but there was enough optimism expressed in the current state of the economy to leave open the prospect of a September rate increase.
Key Quotes:
"That now is providing some upside for USD/JPY, especially in the wake of the US real GDP data for Q2 that confirmed a rebound and put growth back at levels consistent with a further drop in the unemployment rate."
"However, we see little upside on a sustained basis for USD/JPY at this stage with falling commodity prices, China uncertainties and general EM FX weakness likely acting to help support the yen. The large current account surplus in Japan is also a reminder of potential repatriation flows that will increasingly emerge at higher USD/JPY levels."
Key Quotes:
"That now is providing some upside for USD/JPY, especially in the wake of the US real GDP data for Q2 that confirmed a rebound and put growth back at levels consistent with a further drop in the unemployment rate."
"However, we see little upside on a sustained basis for USD/JPY at this stage with falling commodity prices, China uncertainties and general EM FX weakness likely acting to help support the yen. The large current account surplus in Japan is also a reminder of potential repatriation flows that will increasingly emerge at higher USD/JPY levels."