A nice update of Saxo Bank, the Danish newcomer in the Dutch banking landscape, on developments in the FX market. Several analysts from Saxo see a sharp move in the dollar-yen relationship USD-JPY. According to John Hardy, FX consultant at the Danish bank,
Another expert from FX Saxo Bank, Nick Beecroft, believes the Japanese finally want an end to the overvaluation of the JPY. “The Bank of Japan believes that this might be one of the reasons why deflation seems to be so stubborn. Their recent rhetoric suggests that they search for quantitative expansion, or at least will keep interest rates low, perhaps even both. ”
Meanwhile, according to Beecroft huge issuing of Japanese government bonds also seems to be a threat. “Imagine a” buyer’s strike “which can cause the interest rates to raise by 1% or even more. This scenario is not completely unthinkable, considering that the overall market looks at current tax exhausted countries with more than just suspicion. We could be heading toward a crash. “
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