Clients see modest upside risks in USD/JPY – Nomura

By FXStreet FXStreet (Bali) – Yujiro Goto, Global FX Strategist at Nomura, notes that their latest clients survey shows modest upside risks in USD/JPY, while expectations for a near-term BOJ easing are subdued.

Key Quotes

“Our latest client survey shows subdued expectations for a near-term BOJ easing. As of mid-October, our clients had lower expectations for an October BOJ easing (21.7%) than BOJ watchers, but expectations of a BOJ easing by December have declined further to just 7.4% from 41.7% previously.”

“The BOJ’s inaction with downgrades in economic and inflation forecasts in October and positive market movement likely reduced expectations for a near-term easing. Similar to expectations among BOJ watchers, about half of our clients (48.9%) still expect the BOJ to ease by April.

“The BOJ downgraded its assessment on inflation expectations slightly at its last meeting, while Governor Kuroda said he is monitoring wage talks with great interest. The development of wage talks will influence market expectations on a BOJ easing.”

“Today Prime Minister Abe said raising wages and the minimum wage is important for the Japanese nominal economy to reach JPY600trn target. Wage talks will be key for Japanese economic policy over the next few months.”

“Although expectations for a near term …read more

Source:: FX Street