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Forex pairs in this Article » USD/JPY (Barcelona) - According to Yujiro Goto, FX Strategist at Nomura, portfolio outflows should accelerate JPY weakness in coming weeks/months.

Key Quotes

"We expect that Japanese foreign investment activities will recover. A widening yield differential along with improving risk appetite should encourage Japanese investors to shift into foreign assets. Expected changes in the investment behavior of three key investors, pension funds, retail investors (toshins), and life insurance companies, are particularly important."

"In addition to expected acceleration in foreign investment by Japanese investors, corporate flows are also expected to keep generating JPY selling, via large trade deficit and elevated FDIs. The flow picture also clearly point further weakness in JPY."

"We expect USDJPY to rise to 110 by end-2014 and to 116 by end-2015. Uncertainties caused by US debt ceiling discussions
will likely put downside pressure on USDJPY in the short term. However, once the US fiscal situation gets clearer, the current level of USDJPY looks attractive for fresh USDJPY long positions."
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