Financial Markets and Interest Rates, USDJPY is in focus.
In the coming months into 2019, we at Classiarius believe that there are a strong of factors that are include but are not limited to accommodative monetary policy, cross border cash flows (especially life companies and pension funds, hedging included) that will favor a weaker Yen. Sure, there are some central bank comments recently that may suggest adjustments but in the long run, we see 114.50 and 115.50 breaking in USDJPY and a push higher.
Chinese stocks will be a driver in the coming months and with more downside in major indices, we see opportunities to buy – at better levels – stocks in China while trading USDJPY, and always keeping a long side bias in USDJPY. Any drop below the 112.10 level has value for those looking to get long.
We do not give trade ideas but the trend for USDJPY does seem to be higher to the 117.00 level by early to mid 2019.
Life Cos. Pensions, Importers and Exporters will likely be more active next week. We suggest you focus on Lifers and Importers as they will set solid parameters. We will be updating.