Forex Flash: USD/JPY to rise at a slower pace - Commerzbank

A G20 meeting with no real result was the best thing for the USD/JPY. "The G20 had to accept that a monetary policy aimed at national targets is the responsibility of the individual country and does not justify external interference – even if the exchange rate moves created do affect other economies. Effects of this nature are to be “monitored and minimised” according to the G20 statement but that is nothing but statement rhetoric without any meaning", wrote analyst Ulrich Leuchtmann, pointing out that Japan’s policy has not been restrained and the G20 have given Japan carte blanche to ease its monetary policy. "Should anyone have hesitated to sell the yen for fear of looming political coordination they can now rest assured and go ahead", he continued, adding that PM Abe's underlined that its policy aims at national targets only, not at the exchange rate...

So, as the threat for the Japanese monetary policy has been averted and as the fundamental picture provides sufficient incentives to buy USD-JPY, the pair has to obtain fewer short term gains to remain attractive. "Hefty short-term gains are no longer required for market equilibrium. As a result our view remains unchanged: USD-JPY is likely to move upwards but at a slower pace than over previous months", Leuchtmann concluded.