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2 Jun 2015
EUR/JPY points to consolidation – Rabobank
FXStreet (Edinburgh) - In the view of Jane Foley, Senior Currency Strategist at Rabobank, the easing programmes by the ECB and the BoJ could take the cross to a consolidative pattern in the upcoming periods.
Key Quotes
“Both the ECB and the BoJ are currently engaged in huge quantitative easing programmes”.
“At the start of the year the EUR plunged ahead of the introduction of the ECB’s programme”.
“While the downtrend persisted through to mid April, EUR/JPY then staged a partial recovery and we expect a choppy, more consolidative tone to sustain in the coming months as both central banks follow currency negative policies”.
“In recent months BoJ Governor Kuroda has developed a more upbeat outlook on the economy”.
“However, when the impact of last year’s consumption tax hike is taken out, Japan’s CPI inflation rate is zero, suggesting that there is a long way to go before the BoJ achieves its 2% inflation target”.
“We see risk of a step up in BoJ policy later this year. However, with the ECB committed to its reflationary policy, EUR/JPY could remain fairly directionless”.
Key Quotes
“Both the ECB and the BoJ are currently engaged in huge quantitative easing programmes”.
“At the start of the year the EUR plunged ahead of the introduction of the ECB’s programme”.
“While the downtrend persisted through to mid April, EUR/JPY then staged a partial recovery and we expect a choppy, more consolidative tone to sustain in the coming months as both central banks follow currency negative policies”.
“In recent months BoJ Governor Kuroda has developed a more upbeat outlook on the economy”.
“However, when the impact of last year’s consumption tax hike is taken out, Japan’s CPI inflation rate is zero, suggesting that there is a long way to go before the BoJ achieves its 2% inflation target”.
“We see risk of a step up in BoJ policy later this year. However, with the ECB committed to its reflationary policy, EUR/JPY could remain fairly directionless”.