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9 Jan 2015
Stay long USD/JPY, target 128 for 2015-end – JPM
FXStreet (Barcelona) - The J.P.Morgan Team, explains that the policy divergence between Fed and BoJ might lead Yen towards 128 levels by 2015-end against the Dollar, and suggest going long USD/JPY via a seagull strategy.
Key Quotes
“Stay long USD/JPY via a seagull. Monetary policy divergence between the Fed and the BoJ remains the key motivating factor behind this trade.”
“Moreover, while USD/JPY has moved substantially already, it is not yet fully pricing the already-announced BoJ balance sheet expansion and the expected rise in US front-end rates.”
“Additionally, JPY shorts are not yet crowded as indicated by IMM data, with more room to add to shorts before the January 2014 extremes are reached. Our year-end target is 128 for USD/JPY and we remain short.”
Key Quotes
“Stay long USD/JPY via a seagull. Monetary policy divergence between the Fed and the BoJ remains the key motivating factor behind this trade.”
“Moreover, while USD/JPY has moved substantially already, it is not yet fully pricing the already-announced BoJ balance sheet expansion and the expected rise in US front-end rates.”
“Additionally, JPY shorts are not yet crowded as indicated by IMM data, with more room to add to shorts before the January 2014 extremes are reached. Our year-end target is 128 for USD/JPY and we remain short.”