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Forex Flash: USDJPY trading above 100 is not a serious concern for now – Nomura

The USD/JPY traded in a narrow range, closing the session flat at 101.76. Although G7 gathered over the weekend, the pair seemed to have little reaction towards the meetings.

According to Yuriji Goto, Strategist at Nomura, “The G7 meeting over the weekend did not officially criticize recent JPY weakness as expected. The Communiqué was not released until after the meeting and thus, G7 countries view on FX market is not likely to be changed from February when they had tele-conference. As the Japanese government has not intervened in the FX market since November 2011, while the BOJ has been purchasing only domestic assets, recent JPY weakness will not be officially criticized from G7 countries in the near future.”

He went on to add, “While USDJPY has been trading above 100 since last Thursday, the government’s stance on the FX market might not have changed. Prime Minister Abe today said at parliament that recent FX movement is positive for the economy, even though the government will keep monitoring the impact on fuel prices and so on. Vice Finance Minister Obuchi also stated recent FX movements will have a positive impact on the economy, while the government will carefully monitor the FX market. These comments suggest to us that USDJPY trading above 100 is not a serious concern for the government for now.”

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