Forex Flash: G20 FinMin meet is key – BBH

Brown Brothers Harriman analysts note that the key event this week will be the G20 Finance Ministers and central bankers meeting in Moscow Thursday and Friday.

They continue to believe that Aso’s comments on Friday were designed to help blunt any criticism from G20 over its perceived weak yen policy. They feel that by publicly bemoaning the speed of the yen’s fall and refraining from setting any specific numerical targets for the exchange rate, Japan officials should be able to avoid being singled out by G20. They write, “Instead, Japan officials should simply continue to express a desire to stimulate the economy and meet the 2% inflation target. If a weaker yen is a by product, then so be it. We could see further corrective/consolidative trading for the yen this week ahead of G20, with markets wary of the potential pushback against Japan. If no pushback materializes, then yen selling should start anew.”