Forex Flash: USD/JPY expected to reach 85 before year-end - NAB

FXstreet.com (San Francisco) - According to NAB in a research note, USDJPY is up 100 pips in early NZ trade following the results of Sunday's Japanese election; the results are not yet finalized, but the LDP and New Komeiti (NK) together are expected to be voted into 'super majority' status. Since the market has already accepted this victory, the spotlight now may begin to shift back toward the US budget negotiations on Capitol Hill.

From NAB: "Yen volatility will likely have influence on FX rates across the G10 spectrum this week, alongside developments in fiscal cliff negotiations."

NAB continues: "We do & expect to see Y85 print before the year is out, and are not yet of the view that positioning remains a major impediment to further yen weakness."

NAB on the Fiscal Cliff implications in FX: "The risk of the US going at least temporary off the cliff therefore remains significant, and remains the biggest threat to the risk rally/weaker USD into year-end."