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2 Jun 2015
JPY and risks to Asia FX – RBS
FXStreet (Barcelona) - According to Paul Robson, Senior Trading Desk FX Strategist at RBS, the expected rise in USD/JPY signals some upside risks to Asia FX too.
Key Quotes
“We anticipate further gains in USD/JPY multi-week which carries some renewed USD/Asia upside risk too.”
“USD/MYR looks a place to focus as we expect renewed oil price softening. The IMF has said that it no longer regards the Chinese renminbi as undervalued. We suggest that the currency looks increasingly richly valued, having surged against both JPY and EUR.”
“We believe CNY/JPY is a key macro indicator - it tells the important tale of how Japan is exporting its deflation problem to someone else - China - which has a pressing deflation problem of its own. We don’t expect China to respond by collapsing the currency. But it does need to respond somehow, not least as the ECB also exports its disinflation problem elsewhere (including to China) via a weaker EUR.”
Key Quotes
“We anticipate further gains in USD/JPY multi-week which carries some renewed USD/Asia upside risk too.”
“USD/MYR looks a place to focus as we expect renewed oil price softening. The IMF has said that it no longer regards the Chinese renminbi as undervalued. We suggest that the currency looks increasingly richly valued, having surged against both JPY and EUR.”
“We believe CNY/JPY is a key macro indicator - it tells the important tale of how Japan is exporting its deflation problem to someone else - China - which has a pressing deflation problem of its own. We don’t expect China to respond by collapsing the currency. But it does need to respond somehow, not least as the ECB also exports its disinflation problem elsewhere (including to China) via a weaker EUR.”