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Forex Flash: USD/JPY may see downside ahead - Societe Generale

FXstreet.com (Barcelona) - Sebastien Galy, Senior FX strategist at Societe Generale notes that of late he is particularly focused on the potential range for USD/JPY looking forward.

He comments that following the BOJ QE policy announcement, his valuation model estimates a fair value of 99 for USD/JPY (93 pre BoJ meeting), with a topside of 116 over the next two years using a quantile estimation. He writes, “In a deep risk-off environment, USD/JPY will have a tendency to fall to the lower 90s. Deep downside vols will steadily be crushed at higher levels over the next two years, similarly to the experience with the SNB floor.”

Forex Flash: Will BoJ monetary policy impact China? – Deutsche Bank

With the BoJ aggressively on the front foot there are considerable discussions on what a weaker JPY means for various economies. According to Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank, “Given new assumptions on Japan's GDP growth and inflation, we think the aggressive monetary easing by the BoJ will lift Chinese export growth by 1ppt and China's GDP growth by 0.1ppt.”
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Forex: EUR/CHF testing 1.2200 level

The EUR/CHF has been an unusual market mover today, building off of yesterdays advance to test the 1.2200 level during US trading Tuesday. While operating off its session highs of 1.2215, the cross has managed to notch a gain of +0.22% in these moments.
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