USD/JPY: A rise above 109.10 needed to suggest a bottom – BBH

By FXStreet According to analysts from Brown Brother Harriman, the yen’s rally may be easing; they see that a rise above 109.10 in USD/JPY is needed to improve the technical outlook of the US dollar.

Key Quotes:

“The yen’s surge may be easing. It made a new marginal high in Asia, but has not been able to sustain it. Technically, a hammer candlestick pattern may be traced out by the greenback’s recovery today.”

“Supporting the greenback is the movement in interest rate differentials. The US 10-year premium over Japan has widened by nearly 10 bp since last Thursday. Near 184 bp, it is the widest this month. The two-year premium has also widened at 96 bp. It is also the widest this month.”

“The healthier appetite for risk, reflected in the three-day 2% rally in the MSCI emerging market equity index and the rally to new five-day highs in the MSCI World Index (developed equity markets) are not typically associated with an appreciating yen.”

“There does seem to be a seasonal pattern of yen strength in the month of April. The yen has appreciated against the dollar in four of the past five Aprils and five of the …read more

Source:: FX Street