In the analyst’s view, the fact that the yen was able to benefit from the increased uncertainty also illustrates to what extent the patterns on the FX market have hardened. “With the appointment of Haruhiko Kuroda as the new Governor of the BoJ (currently he is President of the Asian Development Bank) the next step towards a more expansionary monetary policy has been taken”.
Commerzbank thinks that it doesn’t mean that the analyst team should reconsider its USD/JPY outlook of 100 for year end. “First of all we expect sentiment to improve considerably again, secondly and more importantly the recent reaction in USD-JPY illustrates that many market participants have not yet fully grasped the difficulties Japan is facing”, Karpowitz says. “Even though the majority of analysts are already predicting a JPY weakness USD-JPY still has upside potential”.