BTMU FX Strategy Research notes that BoJ Governor Kuroda today acknowledged what was already evident in BoJ JGB purchase data – that the pace of purchases has slowed markedly from the official annual target pace of JPY 80trn to around JPY 60trn.
“While this is merely an acknowledgement of fact it is also a probable first step in an actual shift in the pace of purchases,” BTMU adds.
Still, BTMU doesn’t expect this to provide any support for the yen at this stage.
“Negative yen momentum is clear and with yields rising in most of the major key developed economies, the yen is likely to remain under downward pressure,” BTMU argues.
A key factor supporting this view is that BTMU’s short-term USD/JPY valuation model is moving in sync with the spot rate validating this move to the upside.
USD/JPY is trading circa 113.88 as of writing.
Source: BTMU Research
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