The consensus is constantly looking for USD-JPY to rise. This has fostered a prejudice that interprets most breaking Japanese news in terms of potential adverse implications for the JPY. The latest example is the recent weakness of the JPY as Japan moves ever closer to a possible consumption tax hike. This has also been associated with further QE. We believe the logic behind the resultant rally in USD-JPY is flawed and will reverse. Looking further out 2012 will finish with a lower USD-JPY, in our view, once again confounding the consensus.
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Global Research