Nomura Raises Yen Forecasts on Economic Uncertainty, Drop in U.S. Yields
Sept. 6 (Bloomberg) -- Naomi Fink, a Japan strategist at Bank of Tokyo-Mitsubishi UFJ, talks about the outlook for Japan's economy including the yen and monetary policy. She speaks with Maryam Nemazee on Bloomberg Television's "Countdown." (Source: Bloomberg)
Nomura Securities Co. raised its forecasts for the yen, citing global uncertainty and declining yields on U.S. debt.
Nomura expects the yen to end 2010 at 82.50 against the dollar from an earlier target of 87.50, it said in a report dated yesterday. The yen may reach 80 per dollar by March 2011, the company said, nearing the record of 79.75 reached in 1995. Japan’s currency will finish next year at 85 to the dollar from a previous forecast of 90, according to the report.
Should the outlook for the U.S and global economies become more uncertain "further gains for the yen become increasingly certain,’’ Taisuke Tanaka, a Tokyo-based foreign-exchange strategist at Nomura, wrote in the report.
Yields on U.S. two-year notes are the best signal for the dollar-yen rate, and those yields are likely to fall to 0.4 percent as prospects for the U.S. economy fade, Tanaka wrote. The yen will peak against the dollar “early next year,” according to the strategist.
The yen traded at 84.21 versus the U.S. currency as of 10:41 a.m. in Tokyo
To contact the reporter on this story: Shigeki Nozawa in Tokyo at snozawa1@bloomberg.net
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