Further USD gains against the JPY lie ahead over the medium-term - BBH
|Analysts at Brown Brothers Harriman, notes that since November 4, the dollar has risen 11% against the yen, reaching almost JPY114 in Asia on Friday before profit-taking emerged.
Key Quotes
“The RSI has rolled over, and the Slow Stochastics is about to turn, while the MACDs are still trending higher. Dollar buying re-emerged ahead of JPY112.50 and support extends toward JPY112.30 A break could see another yen decline that pushes the greenback toward JPY111.60. The US rate premium continued to widen. The two-year advantage rose to 1.31%, which is the most since 2008. At 2.31%, the 10-year premium is at a five-year high.”
“In the bigger picture, it looks the drop in the dollar from last year's high (almost JPY126) to this year's low (circa JPY99) was corrective in nature, meeting a little more than the 50% retracement target of the Abenomics induced rally. This suggests further dollar gains against the yen lie ahead over the medium-term. Near-term, the JPY114.35-JPY114.65 may offer some resistance on the way to JPY115.00-JPY115.60.”
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