Despite the outflow of investments by Japanese citizens and funds, Lien sees hope, as the USD/JPY is hitting critical resistance at 120, and the EUR/JPY at 150. And the weak yen will have a beneficial effect on exports. Corporate earning estimates are up
and strong exports will continue through November and December to help turn things around for the yen. In November, she sees a USD/JPY low at 117.50 and a high at 121.00.
Korman Tam, trader and analyst at MG Financial Group, notes the USD/JPY hit 119.83 on Oct. 11, a 10-month high, and that there are still a record number of short positions. So before the yen gathers any strength, it will test 121.35, the high from last December. Tam says Euro zone disappointment with the Bank of Japan’s reticence to raise interest rates is weighing on the currency. “We’ve had a lot of Euro zone officials very unhappy with the EUR/JPY rates and that has kept a ceiling [1570] over the euro yen pair.”
