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Forex Flash: USD/JPY may lack fuel to sustain heavy gains – Westpac

FXstreet.com (Barcelona) - According to Sean Callow, a Global FX Strategist at Westpac, “It may seem heroic soon after the USD/JPY’s 4.5 year highs, but we remain unconvinced that the pair has the fuel to sustain such heady gains.

BoJ policy has not changed since the 4 Apr announcement and we expect Bernanke will at least interrupt the dollar’s bull run. Moreover, while Japan has finally resumed net purchases of foreign bonds, the scale at this stage is minimal. We remain neutral on the week and see significant downside risks multi-week/month.”

The Bank of Japan meets Tuesday-Wednesday, with no new policy moves on the table but interest in the commentary. The last statement was markedly brief as the BoJ had announced their ‘Quantitative and Qualitative Monetary Easing’ program three weeks earlier. The March ‘All Industry Activity Index’ is due Tuesday and March machine orders Fri 17 May.

Forex Flash: Risk appetite for fixed income on the rise – Goldman Sachs

The dramatic growth of retail demand for fixed income assets to the detriment of equity has been one of the most salient post-crisis developments. According to the Economics Research Team at Goldman Sachs, “This shift in fixed income allocations, which has largely benefited corporate bonds, has fuelled concerns among fixed income investors about the risk of an abrupt reversal of fund flows.
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Forex Flash: USD/JPY has a bullish bias – BTMU

Bank of Tokyo Mitsubishi UFJ analysts feel that USD/JPY has a bullish bias and is set to range between 101.00 and 104.00.
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