Stephen Jen: Sell-off in USD/JPY doesn’t make sense

Author: Adam Button | Category: News

I’m just reading some comments from Stephen Jen who was a superstar FX strategist at Morgan Stanley and now runs his own outfit at SLJ Macro Partners.

His track record lately isn’t perfect but he’s still one of the smartest guys out there. In comments to a Dow Jones editor he said Thursday’s Bank of Japan decision could be a positive catalyst:

“The sell-offs in USD/JPY and the Nikkei don’t make sense. I think Kuroda will likely positively surprise the market.”… “Kuroda will prevail. This is like a boxer before a big fight, or Bruce Banner in Incredible Hulk.”

He has been bearish on the euro this year and says Cyprus may leave the eurozone in the not-too-distant future.

USDJPY daily chart April 2, 2013

USD/JPY broke some important support levels earlier today but it has rebounded and is unlikely to close below them. I agree that Kuroda is likely to be aggressive and like USD/JPY longs but there is a serious risk of disappointment.

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