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27 Mar 2014
USD/JPY moving in on 102 handle
FXStreet (Guatemala) - USD/JPY has been threatening the downside again when the pair dropped to challenge the 102 handle, sliding 40 pips on the session from the highs.
However, the general consensus in markets is for a weaker Yen with the looming tax hike on April 1st and the BoJ’s need to possibly act on rates in time to come to offset the burden on consumers.
JPY to depreciate
The Global Markets Research team at the Bank of Tokyo-Mitsubishi UFJ, Ltd explained that they maintain their view that JPY will depreciate, as we do not see any strong JPY repatriation flows close to the end of FY13.
US-Japan yield gap to lead to USD/JPY buying?
The same report from the Bank explained that the correlation between the Nikkei index and USD/JPY has been weakening. “Instead, the US-Japan yield gap and USD/JPY have become more correlated. After the sales tax is hiked in April, USD/JPY and Japanese capital flows may pick up more than we envisioned in our main scenario”.
USD/JPY Levels
The 20 DMA is 102.25, the 50 DMA is 102.46 and the 200 DMA is 100.53. RSI (14) reads 49.95. Supports are ascending from 101.27, 101.49, 101.67 and 101.83. Spot is 102.12 while resistances are 102.26, 102.49,102.69 and 102.86.
However, the general consensus in markets is for a weaker Yen with the looming tax hike on April 1st and the BoJ’s need to possibly act on rates in time to come to offset the burden on consumers.
JPY to depreciate
The Global Markets Research team at the Bank of Tokyo-Mitsubishi UFJ, Ltd explained that they maintain their view that JPY will depreciate, as we do not see any strong JPY repatriation flows close to the end of FY13.
US-Japan yield gap to lead to USD/JPY buying?
The same report from the Bank explained that the correlation between the Nikkei index and USD/JPY has been weakening. “Instead, the US-Japan yield gap and USD/JPY have become more correlated. After the sales tax is hiked in April, USD/JPY and Japanese capital flows may pick up more than we envisioned in our main scenario”.
USD/JPY Levels
The 20 DMA is 102.25, the 50 DMA is 102.46 and the 200 DMA is 100.53. RSI (14) reads 49.95. Supports are ascending from 101.27, 101.49, 101.67 and 101.83. Spot is 102.12 while resistances are 102.26, 102.49,102.69 and 102.86.