OctaFX | OctaFX Forex Broker
Open trading account

JPY: Weighing the odds? – Rabobank

Jane Foley, senior FX strategist at Rabobank, notes that the safe havens CHF and JPY are the best performing G10 currencies on a 1 day view, reflecting the poorer tone of oil and stocks and reflects market concerns that tensions between the US and China could rise again.

Key Quotes

“Insofar as markets have been lifted by optimism surrounding the trade deal for some months now, we maintain there is a significant risk that focus will return to the shortfalls of the deal. Largely on the back of this, we see risk of USD/JPY dipping towards the 107.00 area around the middle of the year.”

“US suspicions about Chinese practices have been highlighted by the pressure exerted by China hawks in Washington on the Trump Administration to draft rules that would block more sales to Chinese telecoms giant Huawei.”

“It has been clear for some time that Washington’s misgivings regarding China stretch well beyond trade and into the realms of national security and global hegemony. For this reason we see it as enviable that tensions between the two nations are set to rise again. This has the potential to impact market expectations about world growth, reduce risk appetite and increase demand for the safe haven JPY.”

“The JPY’s function as a safe haven can limit the day to day influence of Japanese policy makers on the exchange rate. That said, the BoJ’s vast QQE policy and its negative interest rate appear to have had some success in undermining the JPY.”

“For now we expect the JPY to be buffeted mostly by changing levels of risk appetite rather than domestic news. Consequently we are looking for a moderately stronger JPY to emerge during the course of the year.”

China's soybean imports from US to rise significantly after phase-one deal – Global Times

The phase-one of the US-China trade deal will pave the way to a significant increase in China's soybean imports from the US, the Global Times reported
Read more Previous

US: NY Empire State Manufacturing Index improves to 4.8 in January from 3.3 in December

The business activity in New York State's manufacturing firms expanded at a slightly better pace in January than they did in December with the Federal
Read more Next
Start livechat