Risk-on, rising US front-end yields and positioning supportive of USDJPY higher - BNPP

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Dec 17, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Delhi) – Research Team at BNP Paribas, notes that the weekly Japanese MoF portfolio flow data continued to signal steady Japanese demand for foreign securities and the Nikkei 225 index has responded positively to the Fed hike, up more than 1.5% at present.

    Key Quotes

    “An improving risk environment, combined with continued JPY portfolio outflows and rising US front-end yields, provides a powerful combination supportive of USDJPY higher – particularly given that BNP Paribas Positioning Analysis signals FX investors hold a net short USDJPY position.”

    “Long USDJPY remains one of our top trades for 2016, where we target a move to 134 by the end of next year. Elsewhere, New Zealand’s Q3 GDP growth came in at 2.3% y/y, in line with expectations. We remain bearish on the G10 commodity bloc, expressed via our existing short AUDUSD trade recommendation.”
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