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11 Jun 2013
Flash: USD/JPY virtually non-tradable in short term - Societe Generale
FXstreet.com (London) - Kit Juckes for Societe Generale said the BOJ raised the economic assessment for a 6th month but resisted the temptation to react to market volatility.
USD/JPY towards 0.9500
At this point, she thinks that is the right thing to do. She can't imagine Japanese investors will feel emboldened to shift cash overseas and weaken the currency while Fed-induced volatility ravages EM most and all other markets besides. She said Central bankers like to think they rule the world but much has been done, the data have been surprisingly good and it's time to let the market do its worst, which in this case, is another savage round of stop-losses in USD/JPY, probably propelling it towards 95.
USD/JPY needs new range
She feels USD/JPY needs to find a new range off which to build a base for the next leg higher in this move. A re-test of 95 is possible as stops are triggered (again). She said that being bullish USD/JPY in the face of EMFX mayhem and interest rate volatility seems foolish, so for all her long-term conviction in this trade, she still thinks it is virtually untradeable in the short term.
USD/JPY towards 0.9500
At this point, she thinks that is the right thing to do. She can't imagine Japanese investors will feel emboldened to shift cash overseas and weaken the currency while Fed-induced volatility ravages EM most and all other markets besides. She said Central bankers like to think they rule the world but much has been done, the data have been surprisingly good and it's time to let the market do its worst, which in this case, is another savage round of stop-losses in USD/JPY, probably propelling it towards 95.
USD/JPY needs new range
She feels USD/JPY needs to find a new range off which to build a base for the next leg higher in this move. A re-test of 95 is possible as stops are triggered (again). She said that being bullish USD/JPY in the face of EMFX mayhem and interest rate volatility seems foolish, so for all her long-term conviction in this trade, she still thinks it is virtually untradeable in the short term.