Keeping up with Japan
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USDJPY fell after a surprisingly weak Japanese GDP report, and the greenback is generally under pressure despite further signs of risk aversion. Is the USD rally over with
…YoY GDP deflator reading. You know things are bad when you are counting on deflation to bump growth into the positive category. Even more worrying for the country, the Japanese Yen has strengthened since then, further threatening the export-dependent economy. Officials were out again over the weekend jawboning again on the Japanese Yen, though the rhetoric at this point has been fairly underwhelming. The bond sell-off we mentioned on Friday promptly evaporated today on the Japanese growth news and a bit of ugly follow through on Friday’s very ugly close for risk appetite, and this pushed the JPY back to stronger levels vs. the USD and elsewhere. Still, history shows us that when specs begin to get long JPY in large amounts, that any JPY rally is not likely to last much longer. The question now is whether we get a spike before a reversal in USDJPY or whether current levels are already offering value for JPY skeptics (count us among them, even if we don’t trust valuation judgments in the shortest term).US…
Original post:
FX Update: USDJPY falls again on weak Q2 GDP in Japan
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