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Forex Flash: A storm to and through 100 brewing in USD/JPY - RBS

If the ongoing rally in the USD/JPY did not satisfy enough buyers, RBS FX strategist Greg Gibbs thinks more opportunities to buy the pair will soon arise, with "a potent storm sharply higher to and through 100..." he says. The analyst speculates on "a move higher in 10s yield, and a steeper 2:10s" as a potential catalyst.

Greg expands: "On the outlook for 10Y US yields, Treasury strategy colleagues Bill O'Donnell and John Briggs have for some time now identified 2.06% then 2.13% as key levels of (price) support. That holds for now but, post Payrolls, yields are right back at the top of the range. If that support gives way in 10s, and with 2s yields still anchored as Bernanke and Yellen continue to preach lower for much longer, then 2:10s potentially steepens significantly and takes USD/JPY with it – higher."

Japanese policy initiatives will also be key, Greg says: "Most crucial here will be the 4th April BOJ policy meeting, the first under the new governor (likely Mr Haruhiko Kuroda), which we think will be dovish enough in style and substance to encourage domestic Japanese investment trust and pension fund investors to join in selling JPY in the new fiscal year."

Forex: AUD/JPY holding above 98 on the back of Yen weakness

AUD/JPY is last at 98.38, around session highs, little changed from previous weekly close Friday, and off initial session lows at 97.92, mostly helped on Yen weakness. “AUD/JPY broke above daily resistance at 97.50 and further gains now look very likely,” says FXWW founder Sean Lee.
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Forex Flash: Look for further USD/JPY upside - UBS

A second wave of USDJPY buying is due, notes Gareth Berry, FX strategist at UBS, adding that "Japanese real money is still waiting in the wings and the life insurance industry in particular still has yen to sell."
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