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9 Jul 2015
USD/JPY: increasing downward pressures - BTMU
FXStreet (Guatemala) - Analysts at the Bank of Tokyo-Mitsubishi UFJ, Ltd explained that USD/JPY has come under increased downward pressure over the past week.
Key Quotes:
"The yen is benefitting at least temporarily from more risk-averse trading conditions triggered by heightened investor concerns over Grexit and the economic slowdown in China. The continued sharp sell-off in Chinese equities despite government support measures has unsettled global risk sentiment. Safe haven demand for the yen would likely intensify further if the Greek government fails to secure an agreement for financial support by Sunday which has been described as a final deadline."
"The outcome remains highly uncertain although recent developments suggest reaching an agreement will be very difficult. Greek Samurai bonds are due for redemption next Tuesday which could trigger a credit event. Fed Chair Yellen’s semi-annual testimony could take place amongst heightened external uncertainty. We doubt that Fed Chair Yellen will feel confident enough to provide a clear signal that monetary tightening is likely in September, but remain open to raising rates this year."
"The main message will be that the outlook for policy remains data dependent. The ongoing improvement in the US economy continues to move the Fed closer to tightening policy. The testimony’s impact on the US dollar may prove relatively neutral and more likely will play second fiddle to external events."
Key Quotes:
"The yen is benefitting at least temporarily from more risk-averse trading conditions triggered by heightened investor concerns over Grexit and the economic slowdown in China. The continued sharp sell-off in Chinese equities despite government support measures has unsettled global risk sentiment. Safe haven demand for the yen would likely intensify further if the Greek government fails to secure an agreement for financial support by Sunday which has been described as a final deadline."
"The outcome remains highly uncertain although recent developments suggest reaching an agreement will be very difficult. Greek Samurai bonds are due for redemption next Tuesday which could trigger a credit event. Fed Chair Yellen’s semi-annual testimony could take place amongst heightened external uncertainty. We doubt that Fed Chair Yellen will feel confident enough to provide a clear signal that monetary tightening is likely in September, but remain open to raising rates this year."
"The main message will be that the outlook for policy remains data dependent. The ongoing improvement in the US economy continues to move the Fed closer to tightening policy. The testimony’s impact on the US dollar may prove relatively neutral and more likely will play second fiddle to external events."