JPY Extends Losses

The yen continued to plunge against the greenback, dropping to its lowest level in 3-months at 98.60. The Japanese currency’s role as a safe-haven has lost its luster in recent weeks following the break of the key 92.75-level, sharply weakening in tandem with the latest round of weak economic reports from Japan.

Although the yen has recovered from some of its earlier losses, we anticipate further weakness in the currency over the coming weeks with our initial target seen at 99-figure. However, we look for the 100-level to cap additional moves higher in the USDJPY pair and expect a combination of repatriation prior to the end of the Japanese fiscal year and a return to its role as safe haven currency to benefit the yen.