Forex Flash: USD/JPY stable in the week ahead – BTMU
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USD/JPY
FXstreet.com (Barcelona) - Bank of Tokyo Mitsubishi UFJ analysts hold a neutral view of USDJPY for the week ahead.
They note that, " Obama's win in the U.S. presidential election i) reaffirmed continuous monetary expansion as exemplified in QE3, but ii) also reinforced the political difficulties ahead with a divided Congress in handling the "fiscal cliff"."
Additionally, they believe that the US federal government would have to react to the debt situation, which may hit the statutory upper ceiling in January 2013. The fiscal issue will not be solved immediately. Between the two safe havens, they see USDJPY downside risk being limited as such.
They note that this is especially as the balance of flows in Japan continues to reflect a greater degree of outflows. For the first time, Japan recorded a current account deficit in September on a seasonally adjusted basis which they see as a clear sign that the Yen does not have much leeway to appreciate.
They note that, " Obama's win in the U.S. presidential election i) reaffirmed continuous monetary expansion as exemplified in QE3, but ii) also reinforced the political difficulties ahead with a divided Congress in handling the "fiscal cliff"."
Additionally, they believe that the US federal government would have to react to the debt situation, which may hit the statutory upper ceiling in January 2013. The fiscal issue will not be solved immediately. Between the two safe havens, they see USDJPY downside risk being limited as such.
They note that this is especially as the balance of flows in Japan continues to reflect a greater degree of outflows. For the first time, Japan recorded a current account deficit in September on a seasonally adjusted basis which they see as a clear sign that the Yen does not have much leeway to appreciate.
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