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SocGen: USD/JPY is undervalued

Societe Generale went long on USD/JPY with a target at 105.00 and a stop at 101.70. 

In their view, USD/JPY looks underestimated relative to the Nikkei index. Japanese recovery has lost momentum of late, putting the positive effects of Abenomics under question. This should be a bearish factor for the Japanese yen and a positive one for USD/JPY. 

"Renewed pressure on the BoJ to ease further would obviously support a re-correlation (bullish Nikkei, bullish USD/JPY)", analysts say. 

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