24 Jul 2013
Flash: Stay long on USD/JPY for move up to 105.00 – UBS
FXstreet.com (New York) - Research Analyst Gareth Berry analyzes the current situation of JGB purchases, coupled with the ramifications on the USD/JPY.
Key quotes
“Along with longer-term cash provision, a push deeper into risk assets remains a possibility. While the pace of monthly JGB purchases has accelerated, a further acceleration could be on the cards later this year if the 2% inflation target remains elusive.”
“Switching the inflation index used for inflation targeting is possible too, and could be a trigger for more aggressive easing. This index remains in negative territory even though the index targeted currently has already climbed to 0% YoY.
“We recommend staying long USD/JPY and look for a move up to 105 in three months.”
Key quotes
“Along with longer-term cash provision, a push deeper into risk assets remains a possibility. While the pace of monthly JGB purchases has accelerated, a further acceleration could be on the cards later this year if the 2% inflation target remains elusive.”
“Switching the inflation index used for inflation targeting is possible too, and could be a trigger for more aggressive easing. This index remains in negative territory even though the index targeted currently has already climbed to 0% YoY.
“We recommend staying long USD/JPY and look for a move up to 105 in three months.”