Rabobank - "Near-term, the current apathy in EUR/USD and the lack of clear bias either in a ‘risk on’ or a ‘risk off’ direction suggests that the BoJ will have to think hard if it wants to extend or hasten the current pace of yen slippage. Recently higher yields in US treasuries have been feeding the better tone in USD/JPY and in this context better US data would be helpful for the BoJ. However, this week Spanish yields have also ticked a little higher suggesting that investors may be becoming impatient with the lack of a bail-out request from the Spanish government in the face of the overhang of poor economic fundamentals. If tensions were to rise again in the Eurozone, it would be very hard for the Japanese authorities to fight against the tide of safe haven yen demand. Technically, the break above the weekly cloud base at USD/JPY79.76 is supportive of further upside. However, without a tangible increase in risk appetite across asset classes we suspect that further gains in USD/JPY near-term will run into selling pressure allowing some relief to overbought technical indicators."
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