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17 Mar 2015
Stay long USD/JPY – JP Morgan
FXStreet (Edinburgh) - Analysts at JP Morgan remain bullish on the US dollar and recommended buying the pair.
Key Quotes
“The performance of USD/JPY has been steady rather than spectacular since payrolls”.
“This is in keeping with the pattern of the last few years whereby the beta between
USD/JPY and the dollar index has fluctuated substantially, peaking not surprisingly at the time of landmark BoJ decisions and subsiding thereafter”.
“At present USD/JPY should be regarded as a low rather than high beta version of the dollar index”.
“If the dollar was less overvalued relative to the Fed cycle there would be little point owning such a low-beta dollar pair. But with the dollar looking very stretched relative to the Fed cycle, we are prepared to sacrifice some upside to minimise our exposure to a dollar correction”.
“All told USD/JPY should be pretty well supported by the fact that speculative length in the pair has been pared to a two-year low”.
Key Quotes
“The performance of USD/JPY has been steady rather than spectacular since payrolls”.
“This is in keeping with the pattern of the last few years whereby the beta between
USD/JPY and the dollar index has fluctuated substantially, peaking not surprisingly at the time of landmark BoJ decisions and subsiding thereafter”.
“At present USD/JPY should be regarded as a low rather than high beta version of the dollar index”.
“If the dollar was less overvalued relative to the Fed cycle there would be little point owning such a low-beta dollar pair. But with the dollar looking very stretched relative to the Fed cycle, we are prepared to sacrifice some upside to minimise our exposure to a dollar correction”.
“All told USD/JPY should be pretty well supported by the fact that speculative length in the pair has been pared to a two-year low”.