Further USD gains against the JPY lie ahead over the medium-term - BBH

Sandeep Kanihama FXStreet Contributor

Analysts at Brown Brothers Harriman, notes that since November 4, the dollar has risen 11% against the yen, reaching almost JPY114 in Asia on Friday before profit-taking emerged.

Key Quotes

“The RSI has rolled over, and the Slow Stochastics is about to turn, while the MACDs are still trending higher. Dollar buying re-emerged ahead of JPY112.50 and support extends toward JPY112.30 A break could see another yen decline that pushes the greenback toward JPY111.60. The US rate premium continued to widen. The two-year advantage rose to 1.31%, which is the most since 2008. At 2.31%, the 10-year premium is at a five-year high.”

“In the bigger picture, it looks the drop in the dollar from last year's high (almost JPY126) to this year's low (circa JPY99) was corrective in nature, meeting a little more than the 50% retracement target of the Abenomics induced rally. This suggests further dollar gains against the yen lie ahead over the medium-term. Near-term, the JPY114.35-JPY114.65 may offer some resistance on the way to JPY115.00-JPY115.60.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

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