'Stay long JPY' on trade tensions, policy threats and actions - JP Morgan
|Analysts at JP Morgan argued to stay long on the Yen, citing two main reasons in its latest client note.
Key Quotes:
“Look for the trade-weighted USD to 'maintain recent range'.
'Stay long JPY' on trade tensions … In line with its tendency to fall in July and rise in August, volatility in some markets has begun moving higher on a combination of this week's policy threats and actions.
The policy threat is the Trump Administration's proposal to increase potential tariffs on $200bn of Chinese imports from 10% to 25%, a decision on which should come by late August/early September.
Trade war remains the more worthy wildcard because the Trump Administration seems willing to press its perceived advantage over China as long as the US economy, S&P500 and Presidential approval rating remain resilient.
The BoJ's decision to allow greater volatility in 10Y JGB yields as it furthers a QE tapering that began about 18-months ago as part of the Bank's operational turn from targeting the quantity of money to targeting its price.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.