{"id":901,"date":"2012-02-17T09:00:00","date_gmt":"2012-02-17T09:00:00","guid":{"rendered":"http:\/\/starthostunlimiteddmffassi-ss.stackstaging.com\/bondworld.ch\/home\/sites\/20b\/7\/760c69a11c\/public_html\/investmentworld.ch\/index.php\/2012\/02\/17\/forex-markets-the-yens-long-awaited-downside-reversal-is-taking-place-thanks-to-the-new-policy-strategy-intr"},"modified":"2012-02-17T09:00:00","modified_gmt":"2012-02-17T09:00:00","slug":"forex-markets-the-yens-long-awaited-downside-reversal-is-taking-place-thanks-to-the-new-policy-strategy-introduced-by-the-boj","status":"publish","type":"post","link":"https:\/\/www.investmentworld.eu\/ch\/forex-markets-the-yens-long-awaited-downside-reversal-is-taking-place-thanks-to-the-new-policy-strategy-introduced-by-the-boj\/","title":{"rendered":"Forex markets: The yen\u2019s long-awaited downside reversal is taking place, thanks to the new policy strategy introduced by the BoJ"},"content":{"rendered":"<p style=\"text-align: justify;\"><span lang=\"EN-GB\">Yet another postponement on Greece. Hard to say if,  after all the delays, a rapid conclusion may still support the euro. On  the whole, however, there does seem to be further upside margin, at  least as an impact reaction. <\/span><span style=\"font-family: arial,helvetica,sans-serif;\"><span style=\"font-size: 10pt;\"> <\/span><\/span>..<span lang=\"EN-GB\">&#8230;<\/span><strong><span lang=\"EN-GB\"> <\/span><\/strong><span lang=\"EN-GB\"> <\/span><span lang=\"en-GB\"> <\/span><span lang=\"EN-GB\"><\/span><span lang=\"en-GB\"> <\/span><strong><span lang=\"EN-GB\"><\/span><\/strong><span lang=\"EN-GB\"><\/span><span lang=\"EN-GB\"><\/span><span lang=\"en-GB\"> <\/span><span lang=\"en-GB\"><\/span><\/p>\n<p>  <!--more-->  <\/p>\n<ul> <\/ul>\n<ol><\/ol>\n<ol><\/ol>\n<ol><\/ol>\n<ol><\/ol>\n<hr \/>\n<div style=\"text-align: justify;\"><span lang=\"EN-GB\">Yet another  postponement on Greece. Hard to say if, after all the delays, a rapid  conclusion may still support the euro. On the whole, however, there does  seem to be further upside margin, at least as an impact reaction. The  yen\u2019s long-awaited downside reversal is taking place, thanks to the new  policy strategy introduced by the BoJ. Sterling asymmetrical: up if the  euro rises against the dollar, resilient on poor economic data at home.  Swedish krona weakened by the interest rate cut.<\/span><\/div>\n<p class=\"MsoNormal\" style=\"text-align: justify;\"><span lang=\"EN-GB\">Once  again last week the currency markets were almost exclusively dominated  by the Greek crisis. \u201cAlmost exclusively\u201d as, after a seemingly  interminable wait, a change came elsewhere, namely in Japan, for the  yen.<\/span><\/p>\n<p class=\"MsoNormal\" style=\"text-align: justify;\"><span lang=\"EN-GB\"><strong>EUR <\/strong>\u2013  Once again this week a definitive solution for the Greek crisis was not  found, and the euro suffered as a result, for days, slipping from  EUR\/USD 1.33 to 1.29. Then, on Thursday, a handful of positive  developments, albeit still without the bailout package being issued,  were enough to restore confidence to the market, and the euro climbed  back half way. In light of how the Greek crisis has extenuatingly  dragged on, and the non-linear effects this has produced on the exchange  rate, it is hard to say whether a potential definitive conclusion at  Monday\u2019s Eurogroup may trigger a further upside acceleration or a  retracement in the opposite direction. From a purely technical point of  view, the current configuration does not provide strong directional  indications. Located beneath the 1.3233-1.3165 corridor is the downside  front that in January saw the euro drop to 1.26. In light of the fact  that if the Greek crisis is not definitively solved on Monday, there  would still be time until the following Eurogroup meeting at the  beginning of March, there could be greater changes of the swift  achievement of a final solution triggering an upward reaction. Upside  margin could extend to recent highs at 1.3322 (or even into the 1.34  area). On the other hand, new complications and further delays could  result in a correction of the exchange rate at least into the 1.28 area  (technically, downside margin extends to 1.26).<\/span><\/p>\n<p style=\"text-align: justify;\" class=\"MsoNormal\"><span lang=\"EN-GB\"><strong>JPY<\/strong> \u2013 Important news from Japan: the BoJ has introduced an inflation target  and further stepped up quantitative stimulus. This has contributed to  at last shaking the yen out its stall, tearing it from the USD\/JPY 77  mark and leading it into the USD\/JPY 79 area \u2013 last reached on 31  October following the BoJ\u2019s direct intervention on the market by selling  yens and purchasing dollars, and pushing up the USD\/JPY exchange rate \u2013  for one day only \u2013 from 75 to 79. The new monetary policy approach has  had the effect of decoupling the long-awaited deprecation of the  Japanese currency from a drop in risk aversion resulting from the euro  area debt crisis being overcome. Therefore, the long-awaited downside  reversal of the yen seems to have started at last. Any new complications  on the Greek front may temporarily slow the current movement, but  should not halt it.<\/span><\/p>\n<p class=\"MsoNormal\" style=\"text-align: justify;\"><span lang=\"EN-GB\"><strong>GBP <\/strong>\u2013 On the other hand, domestic issues seem to have no effect on sterling, still guided by the<\/span> strong positive correlation between the GBP\/USD and the EUR\/USD. <span lang=\"EN-GB\">The  Inflation Report confirmed the existence of downside risks to growth  and inflation, but the pound continued to react mostly to developments  in the euro area. Therefore, sterling dropped against the dollar as long  as the euro also dropped, and rose back in step with the single  currency into the GBP\/USD 1.58 area. Data releases were mixed, but  sterling is reacting asymmetrically, showing resilience on poor data,  and climbing on positive releases (such as January retail sales, which  accelerated as opposed to expectations for a contraction). Next week the  minutes of the latest BoE meeting will be released. <\/span>We expect the decision to expand the APF to have been taken unanimously. <span lang=\"EN-GB\">As  the Inflation Report has already been published, the minutes are  unlikely to contain important news, and therefore should have no part in  depressing the pound. Therefore, sterling should continue to track the  euro next week as well, with a stronger predisposition to deepen the  foray into the EUR\/GBP 0.82 area.<\/span><\/p>\n<p class=\"MsoNormal\" style=\"text-align: justify;\"><span lang=\"EN-GB\"><strong>SEK <\/strong>\u2013  As widely expected, the Riksbank cut interest rates from 1.75% to  1.50%, and revised downwards its forecast of economic growth in Sweden  this year, from 1.3% to 0.7%. The SEK reacted immediately, slipping  against the euro, from EUR\/SEK 8.77 to 8.84. A further weakening is  possible on a 1m-3m horizon, also due to the downside risks weighing on  growth as a result of the euro area\u2019s hardships. The central bank, which  has also released its forecasts for the reference repo rate, expects to  keep rates stable for the remainder of the year. Two Board members,  however, voted in favour of a 50bp cut instead of 25bps this week, and  the SEK\u2019s drop seemed to reflect doubts that another rate cut could take  place in the months ahead. In the meantime, the minutes of yesterday\u2019s  meeting will be released on Wednesday 29, February.<\/span><\/p>\n<hr \/>\n<p style=\"text-align: justify;\"><strong>Appendix<br \/>Analyst Certification<\/strong><br \/>The  financial analysts who prepared this report, and whose names and roles  appear on the first page, certify that: (1) The views expressed on  companies mentioned herein accurately reflect independent, fair and  balanced personal views; (2) No direct or indirect compensation has been  or will be received in exchange for any views expressed. Specific  disclosures: The analysts who prepared this report do not receive  bonuses, salaries, or any other form of compensation that is based upon  specific investment banking transactions.<\/p>\n<p><strong>Important Disclosures<\/strong><br \/>This  research has been prepared by Intesa Sanpaolo S.p.A. and distributed by  Banca IMI S.p.A. Milan, Banca IMI SpA-London Branch (a member of the  London Stock Exchange) and Banca IMI Securities Corp (a member of the  NYSE and NASD). Intesa Sanpaolo S.p.A. accepts full responsibility for  the contents of this report. Please also note that Intesa Sanpaolo  S.p.A. reserves the right to issue this document to its own clients.  Banca IMI S.p.A. and Intesa Sanpaolo S.p.A. are both part of the Gruppo  Intesa Sanpaolo. Intesa Sanpaolo S.p.A. and Banca IMI S.p.A. are both  authorised by the Banca d&#8217;Italia, are both regulated by the Financial  Services Authority in the conduct of designated investment business in  the UK and by the SEC for the conduct of US business.<br \/>Opinions and  estimates in this research are as at the date of this material and are  subject to change without notice to the recipient. Information and  opinions have been obtained from sources believed to be reliable, but no  representation or warranty is made as to their accuracy or correctness.  Past performance is not a guarantee of future results. The investments  and strategies discussed in this research may not be suitable for all  investors. If you are in any doubt you should consult your investment  advisor. <br \/>This report has been prepared solely for information  purposes and is not intended as an offer or solicitation with respect to  the purchase or sale of any financial products. It should not be  regarded as a substitute for the exercise of the recipient\u2019s own  judgement.<br \/>No Intesa Sanpaolo S.p.A. or Banca IMI S.p.A. entities  accept any liability whatsoever for any direct, consequential or  indirect loss arising from any use of material contained in this report.  <br \/>This document may only be reproduced or published together with the  name of Intesa Sanpaolo S.p.A. and Banca IMI S.p.A.. Intesa Sanpaolo  S.p.A. and Banca IMI S.p.A. have in place a Joint Conflicts Management  Policy for managing effectively the conflicts of interest which might  affect the impartiality of all investment research which is held out, or  where it is reasonable for the user to rely on the research, as being  an impartial assessment of the value or prospects of its subject matter.  A copy of this Policy is available to the recipient of this research  upon making a written request to the Compliance Officer, Intesa Sanpaolo  S.p.A., 90 Queen Street, London EC4N 1SA.<br \/>Intesa Sanpaolo S.p.A. has  formalised a set of principles and procedures for dealing with  conflicts of interest (\u201cResearch Policy\u201d). The Research Policy is  clearly explained in the relevant section of Banca IMI\u2019s web site  (www.bancaimi.com).<br \/>Member companies of the Intesa Sanpaolo Group, or  their directors and\/or representatives and\/or employees and\/or members  of their households, may have a long or short position in any securities  mentioned at any time, and may make a purchase and\/or sale, or offer to  make a purchase and\/or sale, of any of the securities from time to time  in the open market or otherwise. Intesa Sanpaolo S.p.A. issues and  circulates research to Qualified Institutional Investors in the USA only  through Banca IMI Securities Corp., 245 Park Avenue, 35th floor, 10167  New York, NY,USA, Tel: (1) 212 326 1230. Residents in Italy: This  document is intended for distribution only to professional investors as  defined in art.31, Consob Regulation no. 11522 of 1.07.1998 either as a  printed document and\/or in electronic form. Person and residents in the  UK: This document is not for distribution in the United Kingdom to  persons who would be defined as private customers under rules of the  FSA.<br \/>US persons: This document is intended for distribution in the  United States only to Qualified Institutional Investors as defined in  Rule 144a of the Securities Act of 1933. US Customers wishing to effect a  transaction should do so only by contacting a representative at Banca  IMI Securities Corp. in the US (see contact details above). <br \/><strong><br \/>Valuation Methodology<\/strong><br \/>Trading  Ideas are based on the market\u2019s expectations, investors\u2019 positioning  and technical, quantitative or qualitative aspects. They take into  account the key macro and market events and to what extent they have  already been discounted in yields and\/or market spreads. They are also  based on events which are expected to affect the market trend in terms  of yields and\/or spreads in the short-medium term. The Trading Ideas may  refer to both cash and derivative instruments and indicate a precise  target or yield range or a yield spread between different market curves  or different maturities on the same curve. The relative valuations may  be in terms of yield, asset swap spreads or benchmark spreads.<br \/><strong><br \/>Coverage Policy And Frequency Of Research Reports<\/strong><br \/>Intesa  Sanpaolo S.p.A. trading ideas are made in both a very short time  horizon (the current day or subsequent days) or in a horizon ranging  from one week to three months, in conjunction with any exceptional event  that affects the issuer\u2019s operations. In the case of a short note, we  advise investors to refer to the most recent report published by Intesa  Sanpaolo S.p.A\u2019s Research Department for a full analysis of valuation  methodology, earnings assumptions and risks. Research is available on  IMI\u2019s web site (www.bancaimi.com) or by contacting your sales  representative.<\/p>\n<p>Source: BONDWorld &#8211; Intesa Sanpaolo \u2013 Research Department<\/p>\n<p style=\"position: absolute; left: -10000px; top: 0px; width: 1px; height: 1px; overflow: hidden;\" id=\"_mcePaste\">Normal 0 14       MicrosoftInternetExplorer4<\/p>\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Yet another postponement on Greece. Hard to say if, after all the delays, a rapid conclusion may still support the euro. On the whole, however, there does seem to be further upside margin, at least as an impact reaction. ..&#8230;<\/p>\n","protected":false},"author":2,"featured_media":3456,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"telegram_tosend":false,"telegram_tosend_message":"","telegram_tosend_target":0,"footnotes":"","_wpscp_schedule_draft_date":"","_wpscp_schedule_republish_date":"","_wpscppro_advance_schedule":false,"_wpscppro_advance_schedule_date":"","_wpscppro_dont_share_socialmedia":false,"_wpscppro_custom_social_share_image":0,"_facebook_share_type":"","_twitter_share_type":"","_linkedin_share_type":"","_pinterest_share_type":"","_linkedin_share_type_page":"","_instagram_share_type":"","_medium_share_type":"","_threads_share_type":"","_google_business_share_type":"","_selected_social_profile":[],"_wpsp_enable_custom_social_template":false,"_wpsp_social_scheduling":{"enabled":false,"datetime":null,"platforms":[],"status":"template_only","dateOption":"today","timeOption":"now","customDays":"","customHours":"","customDate":"","customTime":"","schedulingType":"absolute"},"_wpsp_active_default_template":true},"categories":[22],"tags":[],"class_list":["post-901","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-makrooekonomische-daten"],"blocksy_meta":{"styles_descriptor":{"styles":{"desktop":"","tablet":"","mobile":""},"google_fonts":[],"version":6}},"_links":{"self":[{"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/posts\/901","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/comments?post=901"}],"version-history":[{"count":0,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/posts\/901\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/media\/3456"}],"wp:attachment":[{"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/media?parent=901"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/categories?post=901"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/tags?post=901"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}