Forex Flash: USD/JPY still has upside potential – Commerzbank

FXstreet.com (Córdoba) - The uncertainty following the Italian elections has left its mark on the FX market, according to Lutz Karpowitz, analyst at Commerzbank. "The switch to risk-off mode has affected not only EUR-USD but also EUR-CHF and USD-JPY. Anyone who had hoped for the effects to wear off quickly has so far been disappointed".

ListFree.org (Press Release) - Saturday, March 2nd, 2013

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”.

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