Forex Flash: Yen continues to weaken - Nomura

Richard Koo, Chief Economist at the Nomura Research Institute believe that Yen weakness may have some way to go still.

He begins by noting that Yen fell further over the last two weeks, pushing USD/JPY above 92. Elsewhere, Japanese equities, and exporters in particular, gained as a weight that had been pressing down on the Japanese economy and stock market for four years was finally lifted. US shares also rose on mounting expectations of an economic recovery. He feels that a key driving factor is the sense that the US fiscal cliff and Eurozone financial problems have moved out of the foreground for now. While the US housing sector appears to have undergone a revival in recent months, Koo sees that the weakness in other sectors continues. Also in Europe, the real economy remains in a slump even though bond yields in the periphery are down sharply from their peaks.