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8 Oct 2013
Flash: Where is Yen weakness coming from? – BBH
FXstreet.com (London) - Research teams at BBH said the US dollar is recovering after briefly moving below its 200-day moving average against the Japanese yen for the first time since last November.
Key Quotes:
“The low, just below JPY96.60, was seen prior to the opening of Tokyo markets”.
“By the end of the Asian session, the dollar was consolidating in the JPY97.00-20 area. Although the dollar has not maintain its early upside momentum in North America, we think risk-reward pays to be long the greenback, with stops below JPY96.50”.
“News from Japan largely consisted of the August current account figures. The smaller than expected surplus was largely a function of the reduced investment income (interest payments, dividends and to a less extent royalties and licensing fees)”.
“The yen has weakened, but bottomed more than 4-months ago against the dollar. The weakness of the yen is helping lift imports faster than exporters. This is producing persistent trade deficits, which are fairly stable (3-month average deficit JPY724.7 bln and the 12-month average JPY797.2 bln)”.
“This also helps explain the inflation that Japan is experiencing. It is largely a function of imported energy, which when excluded, suggests deflationary forces are still present”.
Key Quotes:
“The low, just below JPY96.60, was seen prior to the opening of Tokyo markets”.
“By the end of the Asian session, the dollar was consolidating in the JPY97.00-20 area. Although the dollar has not maintain its early upside momentum in North America, we think risk-reward pays to be long the greenback, with stops below JPY96.50”.
“News from Japan largely consisted of the August current account figures. The smaller than expected surplus was largely a function of the reduced investment income (interest payments, dividends and to a less extent royalties and licensing fees)”.
“The yen has weakened, but bottomed more than 4-months ago against the dollar. The weakness of the yen is helping lift imports faster than exporters. This is producing persistent trade deficits, which are fairly stable (3-month average deficit JPY724.7 bln and the 12-month average JPY797.2 bln)”.
“This also helps explain the inflation that Japan is experiencing. It is largely a function of imported energy, which when excluded, suggests deflationary forces are still present”.