Yen’s Decline Likely to Resume, Standard Life’s Dickson Says

The yen is likely to resume its decline against the dollar, Ken Dickson, a director of currencies in Edinburgh at Standard Life Investments, which manages about $264 billion, said yesterday in a telephone interview. The Japanese currency rallied 1 percent yesterday after the Bank of Japan decided to defer additional monetary stimulus.

On the yen’s rally:

“I can see why the market is a little bit disappointed on what’s been announced. That disappointment is in the context that dollar yen has moved quite a long way in the past two to three months. Many participants are sitting on some healthy profits.”

On Japan’s currency resuming its decline:

“The dollar-yen trend will continue, but this is a good opportunity for positions to refresh a little and for a short period of consolidation.”

“The deterioration in the current account is such that surplus in the current account is no longer covering FDI outflows, so that the basic balance is now negative. That’s quite an important driver for medium-term currency moves.”

“We know that the BOJ governor is going to be replaced in April, and it’s very much likely that the replacement will be more friendly to the ideas that the government has. There will be fresh impetus on more aggressive easing when the new governor is in place.”

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