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Forex Flash: USD/JPY year-end target at 95.00 – Scotiabank

The Japanese yen is resuming its appreciation against the greenback on Thursday, driving the cross to sub 93.00 levels once again, as investors continue increase their positions in safer assets.

In the opinion of Camilla Sutton, Chief Currency Strategist at Scotiabank, the next big event for the Japanese economy would be the appointment of M.Shirakawa’s successor to command the BoJ, although the upcoming meeting between PM S.Abe and US President B.Obama would be interesting.

In addition, the expert noted the initial concerns amongst Japanese officials regarding the likeliness of higher energy import prices due to the recent depreciation of the yen. “. Finance Minister Aso suggested that a sharp rise in import prices would be a big program; while Economy Minister, Amari, suggested that they would take steps to ease the impact of import price rise. We hold a year-end USDJPY target of 95”, Sutton concluded.

Forex Flash: US frontloaded sequester to drag growth – Goldman Sachs

According to the Economics Research Team at Goldman Sachs, we expect below-trend annual growth of 1.8% in 2013 and an acceleration to 2.9% in 2014. Growth should then remain slightly above that rate in 2015 and 2016. On an annualized sequential basis, we expect a rebound to 2.8% in 2013Q1 and a slowdown to 1.5% and 2% in 2013Q2 and Q3, before a pick-up to 2.5% in the last quarter of the year.
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Forex Flash: NZD/USD uptrend hinges on stability above 0.8300 – Westpac

The RBNZ inflation expectations survey (Tuesday) will be the week’s highlight for markets. According to Global Strategist Sean Callow at Westpac, “We don’t expect a dramatic reversal of the 18-month decline in expectations just yet, indeed the last few CPI prints have been surprisingly low so this survey has downside risk.” The other important release is the Q4 terms of trade (Monday), which could surprise with a bounce based on lower import prices (currency effect). Migration (Wednesday), trade balance (Wed), building permits (Thursday) and business confidence (Thursday) complete a busy week.
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