Thus, the engine to smooth the QE exit process is setup at this stage. This means the U.S. economy should recover on its own without stimulus. The truth might hurt as resilient rebounds of U.S. data in 2013 could largely be from the monthly purchases, since growth engines are still missing amid the slowing global recovery.
Strategy for JPY is "sell the peak" at the moment
It was an ugly period for the Japanese financial market last week when the Nikkei sold off and the Yen surged, which mainly addressed worries on the Fed's QE withdrawal instead of instabilities from the Japanese local market.Net foreign equity purchases in Japan YTD counts at around USD80 billion, compared to just USD11.3 billion on a YoY basis. Hence, large selling off positions could only serve as a warning to policy makers to excise caution if monetary policy needs amending.
Click here to view image. (Source: Bloomberg)
Yesterday, Bank of Japan Governor Haruhiko Kuroda hinted that the current financial condition in Japan still trades within rationale since there are no signs of excessively bullish expectation. He also indicated that rates could rise between one and three percentage points in an improving economy without causing financial instability and would be manageable. His view clearly suggested bullish moves in the Japanese financial market without worries on excessive liquidities in the market.
On the technical side, the USDJPY might be supported at 100.80 in the near term, but the Consumer Price Index (CPI) event risk couldn't be ruled out. The coming resistance stands at around 102.30.
Click here to view image
FXPRIMUS offers retail traders a level of trade execution, service quality and fund safety that are normally reserved only for the largest investors. Serving traders in 205 countries across 6 continents FXPRIMUS combines an unmatched level of fund safety with regular independent audits of company financials and Straight Through Processing, top notch execution with tight spreads, prompt and responsive customer support, ISO 27001 certification in Information Security, ISO 9001:2008 certification in Quality Management and an industry-leading trader toolset that includes free access to powerful trader tools and personal coaching via FXPRIMUS Coach FXPRIMUS truly is The Safest Place To Trade.
Add to Digg Bookmark with del.icio.us Add to Newsvine
FX Primus Ltd.
Kevin De Silva
Director of Marketing
Most Popular Stories
- Apple Wants Samsung to Pay $22M for Patent Dispute Legal Bills
- Twitter Coming to Phones Without Internet
- NASA Fellowships, Scholarships Bring Diversity to Workforce
- Dish Network Leads 2013 Top 50 Advertisers List
- Networks Vie for U.S. Hispanic TV Viewers
- Ad Counts Rise in 2013 for Hispanic Magazines
- Entravision Initiates Quarterly Cash Dividend
- Jobs Report Brings Cheer As Unemployment Drops to Five-year Low
- Warner Bros. Unleashes 'Hobbit: Desolation of Smaug' Merchandise
- Shanghai Smog Forces Factory Shutdowns