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20 May 2015
Downward pressure on JPY to accelerate - RBS
FXStreet (Bali) - Greg Gibbs, FX Strategist at RBS, suspects that higher US yields, and the portfolio effect of the BoJ’s QE program, may accelerate the depreciation on both Japanese yields and the Yen.
Key Quotes
"The annual pace of 80tn net JGB purchases by the BoJ has proved a stabilising influence despite more rapid reallocation away from JGBs by pension funds and Japan Post over the last six to nine months."
"The portfolio effect of this QE is evidence in a relatively strong Japanese equity market and record net outflows to foreign equities in Q1."
"Looking ahead, downward pressure on JGB yields may intensify as asset reallocation flows by large institutions slow."
"USD/JPY has retained a rising trend and is creeping towards the highs set in December and March, supported by a wide in the long term government bond yield spread since December."
"A rising trend may have developed in US yields, and the portfolio effect of the BoJ’s QE program may soon place more downward pressure on Japanese yields and JPY.
Key Quotes
"The annual pace of 80tn net JGB purchases by the BoJ has proved a stabilising influence despite more rapid reallocation away from JGBs by pension funds and Japan Post over the last six to nine months."
"The portfolio effect of this QE is evidence in a relatively strong Japanese equity market and record net outflows to foreign equities in Q1."
"Looking ahead, downward pressure on JGB yields may intensify as asset reallocation flows by large institutions slow."
"USD/JPY has retained a rising trend and is creeping towards the highs set in December and March, supported by a wide in the long term government bond yield spread since December."
"A rising trend may have developed in US yields, and the portfolio effect of the BoJ’s QE program may soon place more downward pressure on Japanese yields and JPY.