Japanese markets are showing signs of strength, but political uncertainty is limiting YEN profits. Despite the bullish signs of shares and rates, the USD/JPY is still stagnant about 147, says Chris Turner, FX analyst in ing.
Alcista Markets, USD/JPy Plan
“When observing the Japanese markets, we can see that Japanese actions rise 3%, the yields of the JGB to 10 years +6pb and the OIS rate at 1 month in JPY set for a year +8pb. Until now, everything is bullish for the Yen. However, the USD/JPY is flat around 147 and that has probably to do with politics.”
“Having reached the trade agreement, it seems that Prime Minister Shigeru Ihiba is ready to assume responsibility for the poor result of the elections of the Upper House and resign. That gives way to a period of political uncertainty and poses questions about how any new prime minister will work with the opposition parties – more fiscal expansion? – And what pressure will be exerted on the Bank of Japan.”
“With such uncertainty and low volatility that still favors the Carry, we do not see a strong justification for the Yen Cotice much stronger from here.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
