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12 Jun 2013
Flash USD/JPY long looks attractive if JGBs stabilise - Nomura
FXstreet.com (Barcelona) - Nomura strategist Yujiro Goto feels that there is a good long opportunity in USD/JPY if the JGB market manages to stabilise.
He notes that while yesterday's decision was disappointing, Governor Kuroda showed slightly more determination to stabilize the JGB market. He adds that Kuroda did not rule out the possibility of introducing longer-term fund-supplying operations if necessary and he suggested he was more confident about the central bank's influence on the entire yield curve. In addition, the BOJ's JGB buying operations were made more flexible as well as more frequent. Thus, Goto notes that the JGB market could still trade in a more stable manner than a month ago. He writes, “We think it worth monitoring Friday‟s 5yr bond auction, as the price may be negatively influenced by today's decision. Current USD/JPY level looks attractive for fresh USD/JPY long positions, but we are staying on the sidelines until we are more confident about JGB market stability.”
He notes that while yesterday's decision was disappointing, Governor Kuroda showed slightly more determination to stabilize the JGB market. He adds that Kuroda did not rule out the possibility of introducing longer-term fund-supplying operations if necessary and he suggested he was more confident about the central bank's influence on the entire yield curve. In addition, the BOJ's JGB buying operations were made more flexible as well as more frequent. Thus, Goto notes that the JGB market could still trade in a more stable manner than a month ago. He writes, “We think it worth monitoring Friday‟s 5yr bond auction, as the price may be negatively influenced by today's decision. Current USD/JPY level looks attractive for fresh USD/JPY long positions, but we are staying on the sidelines until we are more confident about JGB market stability.”