30 Jan 2015
Credit Agricole: Don’t buy the JPY – eFXnews
FXStreet (Barcelona) - The eFXnews Team notes Credit Agricole’s views BoJ might consider additional policy actions by end -2015 will Japan’s CPI nowhere near its target band, as such JPY will remain a sell on rallies against the USD.
Key Quotes
“In Asian hours the main focus was on inflation data in Japan. At 2.4% YoY (cons. 2.3%, prev. 2.4%) December CPI was released above expectations. This supported the JPY, mainly due to the notion that there is a falling probability of the BoJ turning more aggressive anew.”
“However, accounting for the sales tax hike in April 2014, core CPI grew by 0.5% YoY, which suggests that the BoJ remains far from escaping deflation sustainably.”
“As such it can still not be excluded that the central bank will consider additional policy action by the end of the year.”
“Under such conditions the JPY should remain a sell on rallies, in particular against the USD, which should benefit from further rising Fed rate expectations.”
This content has been provided under specific arrangement with eFXnews.
Key Quotes
“In Asian hours the main focus was on inflation data in Japan. At 2.4% YoY (cons. 2.3%, prev. 2.4%) December CPI was released above expectations. This supported the JPY, mainly due to the notion that there is a falling probability of the BoJ turning more aggressive anew.”
“However, accounting for the sales tax hike in April 2014, core CPI grew by 0.5% YoY, which suggests that the BoJ remains far from escaping deflation sustainably.”
“As such it can still not be excluded that the central bank will consider additional policy action by the end of the year.”
“Under such conditions the JPY should remain a sell on rallies, in particular against the USD, which should benefit from further rising Fed rate expectations.”
This content has been provided under specific arrangement with eFXnews.