Think the yen's recent weakness is overdone?
Not so, says Boris Schlossberg.
Schlossberg, a managing director at BK Asset Management, thinks Japan's new prime minister will continue pressing the Bank of Japan for more stimulus moves and a higher inflation target, both of which would weigh on the currency.
" is responsible probably for the greatest move in the ," Schlossberg told CNBC. "His two months of jawboning was more effective than $200 billion of intervention by the Bank of Japan."
Abe would like to see the yen at 90 to the dollar, Schlossberg said, and "it looks like the Bank of Japan is starting to come on board."
The yen's weakness is likely to last for a while, he added. Alluding to the level of the dollar relative to the yen, he said that "as long as that meme keeps going in the marketplace, we seem to be looking to go higher in that trade."
But that said, Schlossberg is keeping a wary eye on the "fiscal cliff" negotiations in Washington. He cites a Citigroup analysis that says talks on averting a wave of tax hikes and spending cuts could have an asymmetrical effect: If a deal is reached, markets will remain close to current levels. But if Congress fails to reach agreement, it could send markets down sharply.
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