FXStreet (Guatemala) – Analysts at Nomura explained that although the consensus is for USD to strengthen as the Fed rate-hiking cycle begins, there remains widespread skepticism about the USD/JPY’s upside potential.
Key Quotes:
“This is because one of the likely assumptions is the political element: both the Japanese and US authorities do not want a further USD/JPY rally.”
“However, we think such an assumption appears to be groundless. Based on (1) the recent JPY appreciation on a REER basis, (2) softening food and energy prices in Japan, and (3) strong US jobs growth, we believe policymakers have significant room to allow USD/JPY to rise further.”
(Market News Provided by FXstreet)