Forex Flash: USD/JPY potential for further upside – Danske Bank
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USD/JPY
FXstreet.com (Barcelona) - The cross is testing levels around yesterday's highs at 81.15/20, buoyed by the generalized sentiment of a weaker yen after comments by S.Abe, signaled as the next Japanese PM in the general elections to be held in December.
Senior Analyst at Danske Bank, M.Helt, commented "Shinzo Abe, the leader of the center-right LDP is close to certain to become Japan's next prime minister and a change in government will increase the likelihood of an even more aggressive actions from BoJ. Abe has previously criticized BoJ for not doing enough to counter the strong yen and has advocated of an inflation target of 2-3% instead of the current target of 1%. Hence, a change in government also implies a higher probability of a weaker JPY".
"We expect BoJ to continue to deliver considerable monetary easing and expect the yen to weaken significantly against both USD and EUR over the coming six months time", he concluded.
Senior Analyst at Danske Bank, M.Helt, commented "Shinzo Abe, the leader of the center-right LDP is close to certain to become Japan's next prime minister and a change in government will increase the likelihood of an even more aggressive actions from BoJ. Abe has previously criticized BoJ for not doing enough to counter the strong yen and has advocated of an inflation target of 2-3% instead of the current target of 1%. Hence, a change in government also implies a higher probability of a weaker JPY".
"We expect BoJ to continue to deliver considerable monetary easing and expect the yen to weaken significantly against both USD and EUR over the coming six months time", he concluded.
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