USD/JPY: Next sustained move will be lower - TDS

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 7, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    FXStreet (Córdoba) - According to analysts from TDS, USD/JPY could decline initially to 116.18, with room for an extension toward the 110 area.

    Key Quotes:

    “After a rally spanning over three years, we think the next sustained move for USDJPY will be lower. We think the June 2015 high should hold as the last year’s narrow range breaks down. Indeed, with USDJPY sharply lower in recent days, this process may already be underway.”

    “Sell USDJPY for an initial target of 116.18 with room for extension to the 110 area.

    “We do not think there is much appetite from BoJ officials to ease further as operational constraints bite and the focus shifts to fiscal policy for stimulus.”

    “As Japan’s current account has returned to surplus, portfolio flows may also be at a critical turning point. Pension reallocation looks to be largely complete (diminishing outflow pressure) and repatriation may ensue as the population ages, biasing the JPY higher. Note that the JPY is the cheapest G10 currency on average. While valuations are not a timing tool, Japan’s more constructive macro dynamics suggest limited JPY downside.”
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