10 Aug 2015
USD/JPY likely to break into new highs - Nomura
FXStreet (Bali) - The Global FX Strategy Team at Nomura expects USD/JPY appreciation to accelerate further, recommending a 1m cal spread (126-128).
Key Quotes
"Although we maintain a medium-term positive view on USD/JPY we have been neutral since exiting the trade after the negative surprise of June US retail sales."
"USD/JPY has traded in a narrow 123.00-124.50 range since then, but we now see a higher possibility of it breaking higher into key US data releases."
"We recommend a 1m call spread (126-128), on the premise that the likelihood of USD/JPY hitting a new high (125.86) is rising."
"The market is pricing in about a 50% possibility of a September Fed lift-off. The FOMC statement and recent comments from Atlanta Fed President Lockhart suggest the bar for a September hike is not necessarily high, from a jobs-market perspective."
Key Quotes
"Although we maintain a medium-term positive view on USD/JPY we have been neutral since exiting the trade after the negative surprise of June US retail sales."
"USD/JPY has traded in a narrow 123.00-124.50 range since then, but we now see a higher possibility of it breaking higher into key US data releases."
"We recommend a 1m call spread (126-128), on the premise that the likelihood of USD/JPY hitting a new high (125.86) is rising."
"The market is pricing in about a 50% possibility of a September Fed lift-off. The FOMC statement and recent comments from Atlanta Fed President Lockhart suggest the bar for a September hike is not necessarily high, from a jobs-market perspective."