FXstreet.com (Barcelona) - On the back of an 11 trl yen in easing by the BoJ, HSBC FX Strategists still believe QE is actually JPY positive, also noting that outright FX intervention efforts would be likely in vein to prevent USD/JPY from weakening in the long run.
HSBC FX Team thinks that at this point, "it also appears very unlikely that the BoJ would embark on supporting a USD-JPY floor as the political ramifications could be potentially damaging."
While the corrective move in Oct has seen 80.00 handle stabbed, currently trading below, "the market will soon realise that even the BoJ is incapable of preventing the JPY from strengthening" HSBC notes.
"USDJPY has been climbing up the stairs but it will soon fall down the lift shaft – ever was it thus" HSBC concludes.
HSBC FX Team thinks that at this point, "it also appears very unlikely that the BoJ would embark on supporting a USD-JPY floor as the political ramifications could be potentially damaging."
While the corrective move in Oct has seen 80.00 handle stabbed, currently trading below, "the market will soon realise that even the BoJ is incapable of preventing the JPY from strengthening" HSBC notes.
"USDJPY has been climbing up the stairs but it will soon fall down the lift shaft – ever was it thus" HSBC concludes.
