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May 03 - 11:00 AM
USD/JPY: 2 Reasons Why Support For JPY Set To Resume M-Term - BTMU
First appeared on eFXplus on May 03 - 09:17 AM

BTMU Research discusses USD/JPY outlook and highlights two key reasons for the JPY to resume its upward pressure (lower USD/JPY) after its sell-off in April. 

"Firstly, as the US Treasury department highlighted in its recently released semiannual currency report, the yen is about 25% lower than its 20-year average on a real effective exchange rate basis, which will surely limit the scope for yen depreciation.

Furthermore, Japan’s current account surplus is likely to remain close to record levels and higher global yields and strong corporate earnings abroad may well result in the investment income surplus within the current account expanding further," BTMU argues. 

"So we do not believe the weakness of the yen in April is the start of a trend and expect the yen to remain on a gradual strengthening trend," BTMU concludes. 

Source:
BTMU Research/Market Commentary

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