FXstreet.com (Barcelona) - The USD/JPY rally is a one way move, on rebound from historic low at 86.96 in Jan 21, the Yen has reached right below 100.00 so far, and according to the National Bank Financial the Dollar will continue appreciating during the whole year.
The Yen achieved an important appreciation from August to December, as investors run to the Japanese currency, which obtained a safe haven status in times of turmoil. Yen strength however has turned to be an important obstacle to Japanese economy, since it is heavily dependant on exports, as a result Japanese trade surplus disappeared on the back of a sharp decline on exports.
Without an strong trade balance, the shine of the Japanese currency has disappeared, as the nominal appreciation of the Yen could not be sustained by fundamental factors, observers the National Bank Financial. On the contrary, a weaker Yen will definitely be a relief for Japanese economy, since Japan is the second largest financier of U.S. udget deficit, an appreciation of the Dollar will boost Japanese profits on capital investments in U.S.
As a result the National Bank Financial expects USD/JPY to grow to 100 in the first quarter of the year and advance towards 105.00 in the second quarter.. On the third quarter the USD is expected to be traded at around 110, to rise to 115 by the last quarter and 118 in the first quarter of 2010.