On Yen, Stocks, Chickens and Eggs
Japanese equities continue to trade nervously after yesterday’s -7.3% plunge on record volumes. At the time of writing, the Nikkei-225 is down another -1.7% and USDJPY is still looking somewhat fragile. We see no reason to change our core FX views however. Long equity positions from foreigners in particular had become severely extended so, if anything, this represents a healthy and long overdue correction after cumulative gains of 75% since November. We still see yen weakness ahead and look for USDJPY to reach 110 by end-2013.
Click here to read the full report: UBS