Mar 27, 2013
Forex Flash: Time to build a short position in JPY again - RBS
“We have noted that the JPY weakness should correlate with the steepening at the long end of the yield curve (10 to 30yrs),” FX Trading Strategist at RBS Greg Gibbs notes, adding: “BoJ buying is unlikely to extend beyond 10 years, and while this may squeeze private sector demand further out the curve, if Japanese investors see genuine inflation risks (some of which are likely to relate to risk of a weaker JPY), then they will be reluctant to purchase very long term JGBs,” the analyst suggests.
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