JPY: Technical indicators have corrected - BBH
|In the second half of February, the dollar could not overcome offers near JPY108 and here in the first half of March, it struggles at JPY107, explains Marc Chandler, Global Head of Currency Strategy at BBH.
Key Quotes
“Several factors have encouraged investors to keep the dollar in its trough against the yen.”
“The unexpected decline in US 10-year yields, briefly below 2.80% on the prospects of weaker US growth did the greenback no favors. A scandal in Japan may see an important proponent of Abenomics forced out of office (Finance Minister Aso?) and weaken Abe. There may be some seasonal pressure due to the coming fiscal year end, though in the week ending March 9, Japanese investors were buyers of foreign bonds since last August.”
“The dollar recorded the lows for the week ahead of the weekend near JPY105.60. Bloomberg has it finishing the week at JPY106.00. JPY105 is psychological important in part because it is seen the last significant hurdle before a test on JPY100. While the dollar has been chopping in a fairly narrow range, the technical indicators have corrected. It seems that onus is on the dollar to take out resistance. Otherwise, the JPY105 area will be tested.”
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