USD/JPY Discussion

It definitely can there are no guarantees in trading.

usjy strong ! more upside.

I think so as well the u/j held firm & finished the day only slightly negative even with all the other yen crosses getting hit hard.

Japan's Abe heaps pressure on BOJ to set 2 percent inflation target

TOKYO | Sat Dec 22, 2012 8:35pm EST
(Reuters) - Japan's next premier, Shinzo Abe, renewed pressure on the central bank to adopt a 2 percent inflation target, saying that he will try to revise a law guaranteeing its independence if his demand is not met.

He also said he will pick someone who agrees with his views on the need for bolder monetary easing to succeed BOJ Governor Masaaki Shirakawa when his term expires in April next year.

"At this month's policy meeting, the BOJ said it would examine (setting an inflation target) at its next meeting" in January, Abe said on television on Sunday.

"If it doesn't, we'll revise the BOJ Law and set up a policy accord with the central bank to agree on an inflation target. We may also seek to have the BOJ held accountable for job growth."

The comments are the strongest warning to date on the possibility of revising the law guaranteeing the BOJ's independence from political interference. It is rare for a prime minister or a would-be premier to make explicit demands on what the BOJ should do at its policy-setting meetings.

Abe, who is set to become prime minister on Wednesday after his opposition Liberal Democratic Party (LDP) won this month's lower house election, has put the BOJ at the center of political debate, urging bolder monetary stimulus to beat deflation.

He wants the BOJ to share with the government a binding 2 percent inflation target, double the central bank's current goal, and ease policy "unlimitedly" to achieve it. There is no specific time frame.

Under pressure, the central bank loosened policy on Thursday for the third time in four months by boosting asset purchases. It also said it would consider setting a higher inflation target at its next policy-setting meeting on January 21-22.

Some central bank policymakers, notably the conservative Shirakawa, have been reluctant to set a 2 percent inflation target in a country which has been mired in grinding deflation for more than a decade.

But they may have little choice but to meet Abe's demand given explicit threats to the BOJ's independence.

Abe's LDP and coalition partner hold a two-thirds majority in the powerful lower house that allows them to overrule bills turned down in the upper house - including one to revise the BOJ Law.

"Countries around the world are printing more money to boost their export competitiveness. Japan must do so too" to keep the yen from rising, Abe said. "It makes a big difference whether the yen is at 80 to the dollar, or at 90 to the dollar."

Abe's new government will have the power to nominate a new BOJ governor when Shirakawa's term ends in April next year. The nomination, unlike other legislation, needs approval by both houses of parliament.

That means Abe needs support from other parties to pass through the nomination in the upper house, where his coalition doesn't hold a majority.

"I'd like to have someone who agrees with our view (on monetary policy)," Abe said on Shirakawa's successor. "There are parties that share my view" which should be willing to cooperate with the LDP in passing the nomination through the upper house, he said.

(Reporting by Leika Kihara; Editing by Nick Macfie)

Interesting read from Reuters

Yes very interesting DaEdge another leg higher all depends on the USA and the fiscal cliff in my opinion I still would like a decent pullback to get in with more longs as i think 90 is possible in the first quarter next year but will have some more smaller ones on a break up.




Japan LDP senior official: Need to consider how to keep DLR/YEN around 85-90 yen
Written by Gerry Davies
December 21, 2012 at 09:20 GMT
Reuters headline.
LDP’s Ishiba: Japan must keep yen at 85 to 90 vs $, Kyodo – Bloomberg

It looks like they may want to keep it around 90

I think we get at least a partial deal band aid type agreement to buy the politicians time before a full deal is reached. Market reaction could keep this pair sideways to slightly bullish if that's the case. Also keep in mind Abe officially takes his post on December 26th & will definitely be speaking its anyone's guess as what he'll say. I wouldn't mind a pullback either but this pair was very resilient Friday after that selloff that hammered the other yen crosses, the usd/JPY finished the day only off 12 pips.

Yes agree completely this pair normally doesn't pullback much it just goes into sideways consolidation.
And as you say it hasn't sold off much at all so may have to bite the bullet and go in heavier on a break of 85.51.

Yen crosses showing small gaps to the upside as of now 10/20 pips depending on the cross. Volume & liquidity will be low we could see there pairs slowly drift upwards.

Agree. Maybe we'll se close of the gap tomorrow, and after that last monday will probably repeat. 84.60 and 85 are the clue.
Some spike is most expected in wednesday with moneatry policy minutes...

A lot of investment banks are still talking a range of 80-85 for the whole of next year.

January 22, perhaps

gl.

Anything is possible. Although I feel that based on Abes speaking that he is clearly ready to make changes to the heads of BOJ is they don't follow his gameplan it's highly unlikely unless he has been bluffing this whole time. I try not to read into what the big banks say. As far as I see it right now the price is going up & looks like it wants to continue in that direction so I will continue to buy on weakness & book profits into strength until the markets tell me it's time to stop.

I like 94 better

Hi Slovenia, how serious are riots in Slovenia and who is behind them? Russians?

I know this is usjy, but this is general macro question to judge whether eu stability deteriorating, which may have jpy impact....

Hey buddy. Where re ya from? Just asking...Riots in Slovenia as they are now happened for the first time in our independency. Russians? Hahaahahahha. You think we're their slaves?
Nothing is behind them...the problem is corruptivness of politicians and managers who robbed our country. The second problem is our law which is written on their merits. So that means it is hard to accuse them (lets say you can't accuse them)...
You must know that for the situation in which we are now is not national crisis guilt but it is an inside problem. It is very similar what happened in Island. But this is similar to first part - robbing the country. I hope the second part will come.
EU has not much influence on it as it seems but you never know what was promised when we became independent from former Yugoslavia in year 1991.

Thanks. I am from AUS. Bit of distance. However, my theory is that all east eu countries will have similar problems. Slovenia may be canary in the mine, that is where my interest coming from. I believe china is interested in eu but this kind of stuff may redirect overflow capital elsewhere as security of investments becomes questionable...

"Abe will hold a press conference today at 12:30 GMT."

Abe wants it USD/JPY to be in range of 90.. for japanese exporters to benefit.. which is highly likely that we will surely go 90+ zone.

Sorry where did You get this news?
im curious (im on short right now

I dont think its a bad place to short but i'm a buyer on dips.
Abe was also reported as saying 90 to the dollar was good but i couldnt find it



Japan LDP senior official: Need to consider how to keep DLR/YEN around 85-90 yen


By Gerry Davies || December 21, 2012 at 09:20 GMT

|| 2 comments || Add comment

Reuters headline.
LDP’s Ishiba: Japan must keep yen at 85 to 90 vs $, Kyodo – Bloomberg