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Sep 11 - 05:00 PM
NKY, USD/JPY: Risk-Profile Decoupling To Continue; Implications For USD/JPY - BofAML
First appeared on eFXplus on Sep 11 - 11:00 AM

Bank of America Merrill Lynch Global Research notes that the risk profile of NKY and USD/JPY are diverging on flow, policy and value. BofAML argues that tactical risk asset rally on positioning = bullish NKY more than USD/JPY.

"One interesting observation in the Japanese market since the summer has been the resilience of Japanese equities compared with a stronger yen against USD and other currencies. With the global market staging a tactical rally led by positioning and dovish central banks, we revisited the issue,' BofAML notes.  

"Our conclusion is that short-term upside is greater for Japanese equities while medium-term downside risk still favors lower USD/JPY, essentially keeping the risk profiles of USD/JPY and NKY decoupled," BofAML adds. 

Source:
BofA Merrill Lynch Research/Market Commentary

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