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Yen has been oversold for ages – SG

FXStreet (Barcelona) - “Yen has been oversold for ages “says Kit Juckes, Global Head of Currency Research at Societe Generale, as he sees the trends of - a slowly appreciating dollar, a weaker yen, euro and pound - to continue.

Key Quotes

“The yen has been oversold for ages. This week's economic data comes with unemployment and inflation figures on Friday and inflation is likely to pull back a bit. The policy response in Japan has been huge, but once the effects of the consumption tax increase are adjusted for, the inflation jump isn't that impressive yet.”

“At least in Japan, inflation expectations have moved higher but there are still lots of room for concern and while a stronger yen in the first half of the week is possible, we'll still probably see a push in USD/JPY through 120 before the end of the year and towards 125 in early 2015. Only a major shake-out in global equity markets would really scare yen bears at this point.”

“Nobody wants a strong currency, although a few countries would like a stronger oil price. Last week ended with PBoC's ‘rate cut that wasn't a rate cut', and this week will be dominated by the OPEC meeting and disrupted somewhat by Thanksgiving. But key trends - a slowly appreciating dollar, a weaker yen, euro and pound - look set to continue to varying degrees.”

“The view of our colleagues in SG is that OPEC will - by a whisker - manage to secure agreement to cut production and provide support for a bounce in oil prices. If you feel the lack of confidence in the words, you're getting the right message. If we do get a bounce, NOK and CAD will be the beneficiaries, against SEK and AUD respectively.”

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