FXStreet (Barcelona) - Kit Juckes, Global Head of Currency Strategy at Societe Generale, sees the consolidation pattern to extend around the yen.
"Capital flow data for the US and Euro Zone tell a compelling story: US investors, forced out by low yields at home, are buying foreign assets while foreigners are buying Treasuries to stabilise their currencies. Foreign investors are now buying even more European equities than they are buying bonds, and the sum of long-term flows and current account (the basic balance) tells us why getting the Euro down is so hard."
"But the Japanese data are confusing. There was no rush of money to support the yen's fall in late 2012 or early 2013. But now, with USD/JPY stuck in its tiny 101-103 range, we are seeing significant outflows from Japan."
"Over the last 8 weeks, the total net flow is close to Y400bn per week, comfortably offsetting the small current account surplus. It all makes for a long-term bearish bias for the yen, while failing to help explain anything the yen has done in recent months. Bottom line - still in a 101-103 range."