The information contained herein is derived from sources believed to be reliable, but of which we have not independently verified. Century Financial Brokers L.L.C. (CFB) assumes no responsibility for errors, inaccuracies or commissions in these materials, nor shall it be liable for damages arising out of any person's reliance upon this information. DISCLAIMER: This overview can be used only for informational purposes. CFB is not responsible for any losses arising from any investment based on any recommendation, forecast or other information herein contained.

USD/JPY Analysis

19th May 2012

(For the Week May 20 – May 24)

Current Market Price 103.28

Target 104.75

Stop Loss 101.81Recommendation Buy at Current Market Price

USD/JPY Analysis

The USD/JPY surged as the greenback climbed hitting a 5 year high of 103.31. Bloomberg reported that PM Abe delivered a speech where he announced plans to triple infrastructure exports by 2020 and restore capital spending to ¥70trn per year. There was only no market reaction. This week’s Economist has PM Abe on the cover. Ten year JGB yields are still ‐elevated but have come off their extremes.

The optimism rating for Abe’s policies is higher than any leader ever tested, even Germany’s Angela Merkel, who has long been at the top on this question.

A government report Thursday showed gross domestic product rose 3.5 percent at an annualized pace, the most in a year, propelled by consumer spending and export gains. It underscored the need for steps to revive domestic business opportunities, with the fifth straight quarterly drop in private, nonresidential investment dragging on growth in the first quarter.

The USD/JPY pair initially dipped during the week, but as you can see closed out strong and above the 103 handle. Looking at this chart, there is aptly nothing to suggest that we are going to fall with any significance, even though on the longer-term charts the 103.50 area does offer some resistance. However, the situation now is much different than it was back then, with the Bank of Japan is actively working against the value of the Yen. Quite frankly, a pullback is simply going to be an invitation to buy more in this currency pair.

The information contained herein is derived from sources believed to be reliable, but of which we have not independently verified. Century Financial Brokers L.L.C. (CFB) assumes no responsibility for errors, inaccuracies or commissions in these materials, nor shall it be liable for damages arising out of any person's reliance upon this information. DISCLAIMER: This overview can be used only for informational purposes. CFB is not responsible for any losses arising from any investment based on any recommendation, forecast or other information herein contained.