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Hardy: How strong will the yen get?

It feels as though the market's allocating out of US assets; the view of Saxo Bank's Head of FX Strategy, John Hardy, after USDJPY had its biggest one day fall in more than six months on Tuesday. The weakness of the dollar caught many investors by surprise. The greenback lost 1.4% against the yen and dollar weakness is still in evidence this Wednesday.

John says there are further falls to come, notably in dollar yen crosses, and ranges around JPY101 could soon be tested. A disappointing US employment report last Friday and no hints of further Japanese easing from the Bank of Japan weighed on sentiment.

John's also looking at cable. He says the British pound could strengthen to USD 1.69 or higher after yet more data showed the UK economy is improving quickly. The IMF has said that Britain will be the best performing major economy as far as growth is concerned in 2014.

02:11 minutes
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