FXstreet.com (Barcelona) - Expectations for the Japanese Yen on end of Q1 2013 are neutral, according to JP Morgan FX Strategists, expecting the USD/JPY to hover around 79, and EUR/JPY trading at 103 by March of 2013.
However, according to JPM, there is an upside risk that may send USD/JPY to around 90, and EUR/JPY to the 110 level should one of the following three alternative scenarios materializes in Q1 2013.
(1) US employment figures improve significantly, (2) Significant progress towards a resolution for European fiscal problems boosts risk markets and triggers an unwinding of FTQ trades, which pushes UST and Bunds yields higher, (3) More Fed members start expecting earlier hikes (applicable for USD/JPY only)
JPM adds other trigger events: *US congress debate on fiscal cliff * FOMC meetings (October 23- 24, December 11-12, January 29-30) * BoJ meetings (October 30, November 19-20, December 19-20,January 21-22, February 13-14).
However, according to JPM, there is an upside risk that may send USD/JPY to around 90, and EUR/JPY to the 110 level should one of the following three alternative scenarios materializes in Q1 2013.
(1) US employment figures improve significantly, (2) Significant progress towards a resolution for European fiscal problems boosts risk markets and triggers an unwinding of FTQ trades, which pushes UST and Bunds yields higher, (3) More Fed members start expecting earlier hikes (applicable for USD/JPY only)
JPM adds other trigger events: *US congress debate on fiscal cliff * FOMC meetings (October 23- 24, December 11-12, January 29-30) * BoJ meetings (October 30, November 19-20, December 19-20,January 21-22, February 13-14).
