(The) low-yielding yen is currently a global funding currency in a risk-loving environment, while Asian currencies are beneficiaries of risk-seeking global capital seeking returns in their asset markets.
There's no clear picture of who's going to take the lead and therefore it's hard to see how we're going to get economic reform. The market is going to react negatively.
There's lots of speculators betting that we're going to break the 8 yuan per dollar level soon. The authorities are very averse to speculators trying to make money, so they're making it hard for them.
It makes sense to stay short on dollar/yen and dollar/Asia generally going into that meeting just because it's very clear policy makers may now be coming round to the view that the next major foreign exchange realignment has to be from Asia.
We see these comments as suggestive that the BOK expects a robust economy despite won strength, a factor that gives the market a green light to continue buying the currency on a fundamental basis.
It's not going to be an easy ride. Other currencies are driven by a range of factors but this one is driven by officials. It's like a poker game.
It appears that as long as politics does not threaten steps towards fiscal consolidation or derail growth prospects, the market will be happy to buy Philippines assets on dips.
It will be seen as a green light for further currency strength.
There are some fears that the post-war U.S. economy still finds it hard to go back into full gear.
We have a long way to go in terms of pricing in further Japanese rate hikes. That's the point, which we think the yen will really start to rally.
