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22 Apr 2014
USD/JPY snaps gains, remains long-term bullish
FXStreet (London) - The dollar had fallen against the yen after 7 straight days of gains. The pair continued its bearish momentum through the quiet Easter trading on an improving US macro outlook as well as a changing of the guard on the board of Japan’s JPY128.6 trillion (USD1.25 trillion) Government Pension Investment Fund.
The pension fund has seen the inclusion of three members seen as firmly in the Abenomics camp. Yasuhiro Yonezawa, Sadayuki Horie and Isao Sugaya previously sat on a state panel that advocated that the GPIF cut its domestic bond holdings in favour of non-JPY-denominated bonds as well as a higher equity allocation.
Abe cheerleaders
The changing of the governing board of the GPIF and the anticipated shift in appetite towards non-JPY-denominated assets is seen as bearish for the yen. In addition, the revamped board will likely be a vocal and influential supporter of any further easing programmes carried out by Prime Minister Shinzo Abe.
Yen declines expected to run through 2014
The yen is expected to remain in a broad bearish trend through 2014 as Japanese authorities pursue a weak yen strategy aimed at importing inflation while the US tapers its asset purchase programme in favour of relatively tighter monetary policy.
Stronger US data
Data from the Richmond Fed due later today is expected to show that manufacturing in the NC, SC, DC, MD, VA and WV returned to expansionary territory in March, with consensus expectations of a reading of 2 after falling to -7 in February.
USD/JPY has fallen to JPY102.4900, down 0.13 percent after an overnight high of JPY102.7300.
The pension fund has seen the inclusion of three members seen as firmly in the Abenomics camp. Yasuhiro Yonezawa, Sadayuki Horie and Isao Sugaya previously sat on a state panel that advocated that the GPIF cut its domestic bond holdings in favour of non-JPY-denominated bonds as well as a higher equity allocation.
Abe cheerleaders
The changing of the governing board of the GPIF and the anticipated shift in appetite towards non-JPY-denominated assets is seen as bearish for the yen. In addition, the revamped board will likely be a vocal and influential supporter of any further easing programmes carried out by Prime Minister Shinzo Abe.
Yen declines expected to run through 2014
The yen is expected to remain in a broad bearish trend through 2014 as Japanese authorities pursue a weak yen strategy aimed at importing inflation while the US tapers its asset purchase programme in favour of relatively tighter monetary policy.
Stronger US data
Data from the Richmond Fed due later today is expected to show that manufacturing in the NC, SC, DC, MD, VA and WV returned to expansionary territory in March, with consensus expectations of a reading of 2 after falling to -7 in February.
USD/JPY has fallen to JPY102.4900, down 0.13 percent after an overnight high of JPY102.7300.