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10 Apr 2015
Focus on Abe's stance regarding Yen - DB
FXStreet (Bali) - Japanese nationwide local elections are scheduled this month, with Taisuke Tanaka, Strategist at Deutsche Bank, noting that one key focus will be on Abe administration's stance regarding JPY weakness changes.
Key Quotes
"One of our focuses is on how the Abe administration's stance regarding JPY weakness changes. Because JPY depreciation is estimated to have a greater adverse impact on regional economies and SMEs, government leaders have checked further weakness in the JPY against the USD at over 120 in the months preceding the elections. It also seemed that BoJ Governor Haruhiko Kuroda has cooperated with the government in refraining from commenting that a weak JPY is a matter of course and a plus for Japan's economy."
"However, as long as the BoJ persists with its current QQE, we think he likely views a weak JPY as natural. Following the nationwide local elections, we think the Abe administration's restraint regarding the weak JPY could ease."
"We think US economic data for Q2 will likely show some rebound from weakness in Q1. Even in a recent correction phase, the USD/JPY was receiving strong support from brisk buying on dips by Japanese pension and others. In the medium term, we expect the rate to gradually move toward a new high of over 120"
Key Quotes
"One of our focuses is on how the Abe administration's stance regarding JPY weakness changes. Because JPY depreciation is estimated to have a greater adverse impact on regional economies and SMEs, government leaders have checked further weakness in the JPY against the USD at over 120 in the months preceding the elections. It also seemed that BoJ Governor Haruhiko Kuroda has cooperated with the government in refraining from commenting that a weak JPY is a matter of course and a plus for Japan's economy."
"However, as long as the BoJ persists with its current QQE, we think he likely views a weak JPY as natural. Following the nationwide local elections, we think the Abe administration's restraint regarding the weak JPY could ease."
"We think US economic data for Q2 will likely show some rebound from weakness in Q1. Even in a recent correction phase, the USD/JPY was receiving strong support from brisk buying on dips by Japanese pension and others. In the medium term, we expect the rate to gradually move toward a new high of over 120"