There is still plenty of room for the JPY to rally – SocGen
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The Yen did not take long to reverse its post-BoJ meeting weakness, as the Dollar fell again. Kit Juckes, Chief Global FX Strategist at Société Générale, thinks that delaying the end of YCC will not stop the Yen’s bounce.
“The sheer scale of the Yen’s decline in the last three years means that once the tide has turned, there is lot of scope for it to strengthen.”
“There’s plenty of room left for the Yen to bounce, even if the market must wait a while longer before yield curve control (YCC) is adjusted and then abandoned.”
“The Dollar reached its highest level in real terms since 1985 last September, and if the Yen has fallen far enough to have lot of potential upside, the USD has reached high enough heights to be able to fall a long way before it will appear absurdly cheap.”
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