FXStreet (Edinburgh) – According to Jane Foley, Senior Currency Strategist at Rabobank, the pair could trade between 120 and 124 in the near to medium term.
Key Quotes
“Kuroda’s comments regarding the relative value of the yen has been complimented by those of BoJ Board member Sato who remarked that the degree of difficulty in implemented QQE is rising and that its effect is diminishing”.
“Taken together these comments suggest that the BoJ may have started the long process of preparing the market for a time when the Japanese economy will need less monetary stimulus”.
“That said, given the slow pace of structural reform it is difficult to imagine that the Japan economy can be fully functioning without significant monetary policy support and we would worry that a significant appreciation of the yen would act as a significant setback in the BoJ’s aim of achieving its 2% inflation target”.
“Given that today’s comments from Kuroda come on the heels of the heels of Obama’s (denied) remarks about USD strength being a problem, we would expect USD/JPY to settle into a range between 120 and 124 near-term, with Kuroda’s remarks likely to have strengthened resistance in the 125 area”.
(Market News Provided by FXstreet)