BUZZ-COMMENT-Yen's latest recovery could be short-lived

Credit: REUTERS/FLORENCE LO

Feb 29 (Reuters) - The Japanese yen's latest recovery will likely be short-lived as fundamental and technical factors continue to hurt the Asian currency.

The beleaguered yenregained some ground after a Bank of Japan policymaker hinted at the need to exit ultra-easy policies, pushing USD/JPY below 150 for the first time since February 21. BOJ's Hajime Takata said the central bank must consider overhauling its ultra-loose monetary policy, including an exit from negative interest rates and bond yield control.

Regardless of when Japan exits negative rates, the huge interest rate differential between the Federal Reserve and BOJ keeps USD/JPY's overall bias on the upside. As does the technical picture, with USD/JPY holding above the broken 149.17 Fibo, a 76.4% retrace of the (November-December) 151.92-140.27 (EBS) drop, for fifteen sessions in a row.

As the 30- and 60-day correlations between USD/JPY and EUR/JPY are above +0.70, the two currency pairs tend to move in tandem. A recovery in USD/JPY should see the cross rise also.

For more click on FXBUZ

Daily Chart: https://tmsnrt.rs/48BLBAz

Correlation Chart: https://tmsnrt.rs/3IkZ2tT

(Martin Miller is a Reuters market analyst. The views expressed are his own)

((martin.miller@thomsonreuters.com))

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

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