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Jan 03 - 11:00 AM
USD/JPY: A Strategic Sell On Corrections Targeting 102 - SocGen
First appeared on eFXplus on Jan 03 - 08:56 AM

Societe Generale Research discusses USD/JPY outlook and adopts a strategic sell-on-rallies bias. 

"Our end-year USD/JPY forecast is 102 and while we won't get there in a straight line, we still think we'll get there in due course.

As the US economic cycle rolls over, we'll see USD/JPY make a series of lower lows and lower highs, as the Abenomics-inspired move from below 80 to above 125 is gradually unwound," SocGen argues. 

"This time last year, USD/JPY fell from 113 to 105 in Q1 2018 while 10year US real yields rose from 40bp to 70bp. The market got very short dollars in the process and once US economic surprises turned positive, the dollar recovered.

If the S&P gets its mojo back and bond yields rise, a repeat is possible, but positioning and the economic cycle have moved on. Buy yen on the correction," SocGen notes. 


Société Générale Research/Market Commentary


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