Week in FX Asia – Is the Currency of the Rising Sun in Free-Fall?

How much room has the Yen to fall? The Yen bears seem to be back in full force and are becoming very vocal. The currency of the ‘rising sun' has ended the week sharply lower outright, mostly due to comments from LDP leader Abe suggesting a foreign bond component to the Bank of Japan easing. If true, this would become a game changer for further weakness of the currency, however, if and when decided, it will only ever be a gradual process, as international pushback should become a natural constraint.

Easing hopes in Q1 are expected to provide good support for the currency pair. If US growth outperforms next year, the mighty ‘dollar' could end up pushing the yen deep into a three-figure dollar extreme. Some analysts believe a “significant overvaluation of the yen, a deteriorating balance of payments in Japan and a potential new major shift in their monetary policy” all point to a significant free-fall of their currency. Next month's Japanese election is the unknown variable.

• Japan's Retail Sales Fall in October as Car Sales Drop
• Japan Stocks Rise but Closes Off Intraday High due to Profit Taking
• USD / JPY – A Strong Two Months Pushing Towards 83

• Aussie and Kiwi Near 2-Week Highs

• AUD/USD Technicals – Unable to retake 1.048, breaks 1.046 support

• Aussie Trading Near 1.0460 on Stock Gains and U.S. Budget Optimism

• Philippines GDP surprise decrease rate cut likelihood

• India Q3 GDP to grow by 5.5% – Fin Min

• Bank of Thailand Maintain THB rate at 2.75%

• India Q3 GDP (YoY) 5.3% vs 5.5% expected – USD/INR Reaction

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