Forex: USD/JPY rallies at pre-intervention levels
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USD/JPY
FXstreet.com (Barcelona) - The Christmas holiday allowed a 45-pip gap, from 84.85 to 85.30 as the market restarted on the 26th. From there, the USDJPY kept climbing and printed a high at 85.87, trading at pre-intervention levels (Sept 15, 2010).
The new Japan's finance minister, Aso, has already said "the BoJ has been insensitive to the problem of deflation" and Chief Cabinet Secretary Suga said that the current price action in USDJPY is merely a reversal of past one-sided yen increases. Also appointed yesterday, Economy Minister Amari confirmed he plans to compile an economic stimulus plan in early January and that he will work to meet high market expectations.
"By all means stay long USDJPY, but be alert for a pullback unless Japanese real money joins in soon - although the prospect of BoJ easing on Jan 21st means USDJPY dips should be considered buying opportunities in our view", wrote UBS analyst Gareth Berry, expecting more upside in the near term towards 89.16, break of which would lead to 94.13.
The new Japan's finance minister, Aso, has already said "the BoJ has been insensitive to the problem of deflation" and Chief Cabinet Secretary Suga said that the current price action in USDJPY is merely a reversal of past one-sided yen increases. Also appointed yesterday, Economy Minister Amari confirmed he plans to compile an economic stimulus plan in early January and that he will work to meet high market expectations.
"By all means stay long USDJPY, but be alert for a pullback unless Japanese real money joins in soon - although the prospect of BoJ easing on Jan 21st means USDJPY dips should be considered buying opportunities in our view", wrote UBS analyst Gareth Berry, expecting more upside in the near term towards 89.16, break of which would lead to 94.13.
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