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Jul 09 - 01:24 PM
USD/JPY: A Battle Between Equities & Gold/Bonds - NAB
First appeared on eFXplus on Jul 09 - 11:15 AM

NAB Research discusses USD/JPY outlook and notes that the pair's short term outlook is essentially a battle between equities on one side and gold/bonds on the other.

"The prospect of ECB and Fed easing amid low inflation and anaemic growth, is pushing core yields lower and increasing gold’s appeal, favouring much lower USD/JPY levelsOn the flip side, the recovery in equities, which began in June, is a supporting factor. The FOMC meeting at the end of the month and US earning reporting season, starting in earnest in the second half of July, are two key events to watch," NAB notes. 

"USD/JPY still looks vulnerable to the downside and our expectations of a new Fed easing cycle starting at the end of July, which is traditionally associated with lower 10y UST yields and a softer USD, keeps us with a bias for mildly lower USD/JPY levels over the coming weeks," NAB adds. 

NAB Research/Market Commentary


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