FX INTERVIEW
HR I think that the outlook for the JPY has changed in the long term. It’s not a temporary weakening of the yen, it’s a trend that will stay with us for many years. That being said, it’s
important
the easy gains have been made and we are f lattening out in the advance. For the end of this year, we are forecasting 105 and next year it might go into the region of 110, but it is going to be a much slower
approach
when compared to those 23 big figures that we have
seen
between October last year and this spring.
FXTM What are the current
Japanese
“The manufacturing cost structures in
the US are
monetary policy risks? The Japanese FSA has announced just last week that they are going to increase regulations – introduce higher margin requirements FX trading.
more to
for
HR Tighter regulations are required to avoid surprises. The increase of the margin requirements has a lot to do with the increase in
32 FX TRADER MAGAZINE July - September 2013 cost looking
competitive structures
better in and
compared Asia”
term, but the authorities want to ensure that it happens under orderly market conditions .
FXTM What do you think is the reason for
the commodity currencies
losing so much traction recently – even the Euro is ral lying against the Australian Dol lar.
to note that
volati l ity. However, it doesn’t mean that Japanese authorities want to prevent f lows from Japan to the outside world. On the contrary – the aim is to have these outside flows and to have a weaker yen in the long
HR We are used to understanding the commodity currencies as a quasi-China trade, which from 2002 to 2008 was a very bullish trade. Markets were thinking – who would benefit
from an
expanding China, an
and export boom? The
t r a n s po r ta ti o n, commodities the
was and
Australian
Dollar. When you look at all that now,
it becomes
clear why the value of the Australian currency
dropping. Market participants
the is are
concerned because of the leverage in
Chinese
economy and the policy
changes
the new leadership in terms of how
they are running the economy. The government wants to reduce the financial risks, even if that comes at the cost of a lower growth rate in the medium term. They increasingly look at sustainability, which means
there might be negative
growth surprises in the Chinese economy. In our opinion, this
of undervalued
exchange rate and a
manufacturing answer
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