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Forex Flash: Watch for USD/JPY stops being triggered – Societe Generale

By FXstreet.com,  January 10, 2013, 04:56:00 AM EDT

FXstreet.com (Barcelona) - Whilst there is little concrete news in Japan, a break of USD/JPY 88.50 could trigger stops regardless notes Kit Juckes, Global Head of FX Strategy at Societe Generale.

He notes that BOJ easing is awaited, fiscal easing is awaited and action from MOF is awaited. While yen weakness fuels the Nikkei rally, he feels that it increasingly looks as though the Nikkei rally is fueling Yen weakness too, a proper recipe for an overshoot on the upside for USD/JPY in due course.

Looking elsewhere, Juckes notes that the US is set to release jobless claims data and hold a 30 year auction today. He writes, "Bond yields are 60bp higher than they were in July, but still lot lower than they would be ex-QE. Higher Bond yields will only support the dollar when they drag the whole curve higher. For now I don't expect what goes on at the long end of the curve to affect equities, the dollar or overall risk sentiment." Looking to the UK, he feels that the MPC is probably on hold, on a day dominated by the news that the RPI formula won't be changed -which is important for index-linked gilts, probably irrelevant for the pound.




The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.


This article appears in: Investing, Forex and Currencies

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