USD/JPY trapped in a low range - SocGen

Kit Juckes, Research Analyst at Societe Generale, suggests that the Chinese authorities, with easy fiscal and monetary policies and carefully orchestrated FX devaluation, seem to be doing what the Japanese want (ought?) to be doing,

Key Quotes

“Whereas even if the actual fiscal boost from Mr Abe’s latest plan is modest (sub 1% GDP), the real disappointment is the impression the BOJ have given that they are almost completely out of ammunition (and perhaps, ideas). We may well get more asset purchases in due course and that might, too, reverse the push higher in JGB yields, but I can’t help thinking that a chance has been missed to weaken the yen, drag inflation expectations higher and give the fiscal ease a bit of turbo-charge.

Now, at the very best we will see USD/JPY trapped in a low range (100-105?) and we’re only one bout of August risk aversion away for a slide through 100 where a spike lower would be likely and intervention the last resort of the BOJ.”