Christmas comes but once a year but bank recs come like busses.
Westpac are the latest to read the seaweed and they know exactly when, where and a target for USD/JPY.
They say that there is no reason to go against the BOJ and the government in their efforts to raise inflation
“There seems little to be gained by speculating on an imminent end or reversal of QQE. Rather, the area of speculation should be reserved for whether or not risk-averse balance sheets have moved,”
So far there’s been a split between on the risk-averse balance sheet with retail investors increasing foreign asset buys while institutional are still holding back.
“Our sense remains that this will be a key feature of 2015. That is, institutional investors will be increasingly pushed off shore. We expect to see 130 in USD/JPY in 2015 coupled with flatter curves and spread compression around the world,”
Putting all that into the mixer they recommend buying USD/JPY dips to 115 through the end of the year and into Q1 with a target of 130.
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According to EFX’s trade tracker, at the moment there are 3 banks in USD/JPY positions.
- Credit Suisse – Long at 118, TP 121.80, SL 117.20
- Danske – Long at 119.19, TP 127.50, SL 114
- JPM – Long at 113.99 TP 122, SL 110.65
For details of Sunday’s timeline and events check out Eamonn’s post here
