NZD/JPY on the cusp of a breakdown – Westpac

NZD/JPY is threatening to break lower towards 78.05, driven mostly by NZD underperformance, according to Imre Speizer, Research Analyst at Westpac.

Key Quotes

“The yen itself has not performed well, either, hurt by the weekend’s election result which signalled a likely continuation of Abe’s easy policies. The event calendar highlights this week is CPI (Fri).”

“3 months ahead: The BOJ’s defacto tapering of its asset purchases (JGB purchases are running at JPY 35tr/yr, rather than the 80tr official target) should be yen supportive. In addition, the Japanese economy is seeing a pickup in consumer activity, mitigating any slippage in external demand. The 84 area should cap this cross during the quarter ahead.”