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Forex Flash: Increase in yen outflows to drive USD/JPY towards 110.00 - UBS

FXstreet.com (Barcelona) - Japanese mutual funds bought overseas assets in April, likely triggered in part by the BoJ’s decision to embark on a bolder round of easing on April 4th, says Gareth Berry from UBS.

Mr. Berry observes: "The US dollar was the chief beneficiary. Inside the Eurozone, Belgian bonds saw the best of the inflows. In Emerging Markets, the Singapore dollar, the Indonesian rupiah and the Mexican peso benefitted too.

"Although we note many real money investors in Japan maintain a conservative investment posture, there is scope for a gradual increase in yen outflows as the year progresses. Ultimately, this demand for US dollar-denominated assets is likely to help nudge USDJPY towards our end-2013 forecast of 110" Gareth added.

Forex: NZD/JPY continues to consolidate in tight range on daily chart

The NZD/JPY traded in a very narrow range for a third day in a row, closing down 8 pips at 83.89. NZD Business PMI was released a bit earlier in the session at 22:30GMT, coming in at 54.5 actual vs. the previous print of 53.4. The data did not seem to have much influence on the pair, which is currently edging higher in Asia trade at 84.34. On a final note, we will also see the NZD Budget release due out later at 2:00GMT.
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