Published at 01:42 (GMT) 25 Mar

JPY/KRW, USD/JPY Flows: PM Abe: FX trend positive for Japan, no stagflation (AVNC5801)

PM Shinzo Abe says he sees the recent FX movements (weaker JPY) as positive to Japan economy overall. No risk of Japan economy falling into stagflation. Watching FX impact on gasoline, other family item.

On FX, PM Abe welcomes JPY weakening, though careful not to put a specific target/number like 100/105. Plays down spectrum of stagflation, given some concerns that weaker JPY could drive up imported goods, oil import prices and thus push up inflation. USD/JPY at 94.85-90, eye break of 95 handle, helped by Abenomics as PM Shinzo Abe, with new BoJ in power - will push for more easing. Thus weaker JPY, higher Nikkei, now +1.28%. USD/JPY bids at 94.50-60.

JPY/KRW back down at 11.73-74, from 11.80-85 on Friday as USD/KRW opened sharply lower at 1,115.05 from 1,119.3 close on Friday on firmer EUR, Cyprus deal. Now at 1,112.5. JPY/KRW eye more downside given firmer USD/JPY, Cross/JPY on Cyprus-Troika deal, and lower USD/AXJ. Support at 1,110 for USD/KRW, offers remain at 1,115 now ahead of big 1,120 - 6-month highs levels again. Eye any BoK, MoF comments. And PM Abe comments on positive FX - likely to include JPY/KRW as well - given competition from Korean exporters vs Japan exporters. WL