Yen Resumes New Year With More Weakness -- City Index Asia

Yen Resumes New Year With More Weakness -- City Index Asia 
SINGAPORE -- (Marketwire) -- 01/08/13 --  Location: City Index Asia,
Singapore. We started the New Year with the single biggest theme in
Asia -- Japan. The post Abe election period has been marked by a
steady market rally in the Nikkei and significant weakness in the
Japanese Yen.  
This was mentioned in our December 13 note titled "Traders cast votes
ahead of Japanese election." In that note we wrote "A break above
88.00 in the coming hours could see the AUDJPY hold those levels and
consolidate; a reversal could see the gap filled all the way back to
86.20-86.36 where we see solid support." 
The AUDJPY traded as high as 92.83 in early morning Asian trading
today. That represents a gain of around 6% since our December 13th
note. It's unclear how much lower the JPY will go not just against
the AUD but also against the USD. There is no doubt the BOJ and
Japanese exporters would love to see USDJPY near 100 -- providing a
much needed relief to the export sector. The next few weeks will
contain a key insight as to the resources Japan will put together at
fighting its sluggish growth issues. 
The JPY will no doubt fluctuate on overall global risk sentiment; its
fall has corresponded with lower US 10 year bond yields. We provide
the following chart which shows AUDJPY performance relative to the
ASX200 index. A pullback towards AUDJPY 90.00 should be met with some
solid support -- Australian equities are moving into reporting season
next month with sound results in the banking space expected, while a
US$150 per tonne iron ore price will go a long way to pleasing
traders in key mining stocks like BHP Biliton, Rio Tinto and
Fortescue Metals -- all statistically significant. 
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Contact:
Joshua Raymond
City Index
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