6% rally in Nikkei prelude to USDJPY higher – BNPP

By FXStreet FXStreet (Delhi) – Research Team at BNP Paribas, suggests that the risk sentiment continues to rebound following the more-dovish-than-expected ECB press conference, with WTI bouncing back above $30/bbl and the Nikkei225 index 6% higher.

Key Quotes

“We think this bodes well for USDJPY heading into next week’s BoJ policy meeting. Market expectations for BoJ easing continue to build. BNP Paribas Positioning Analysis signals the market is positioned net short USDJPY and we see considerable scope for the pair to trade higher, continuing to hold onto our bullish seagull recommendation.

Meanwhile, our UK economists have revised their BoE forecast and now expect the first rate hike in February 2017. While lack of yield support should temper any broad recoveries in sterling, EURGBP specifically remains at overvalued levels in our view and should fall further as the ECB appears on course for another round of policy easing in March.”
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Source:: FX Street