Forex Flash: Expect an export driven recovery in Japan - Nomura

Nomura economists are expecting an export driven recovery in Japan to be driven by a pick up in China´s economic recovery, which should deliver positive growth in Q1 2013.

They feel that the export recovery should stimulate domestic demand and ensure the overall economy is in a stable growth phase in 2013. Importantly, they emphasize that, “We expect the BOJ to extend duration of APP-eligible JGBs to 5yr and to raise purchases by ~JPY10trn at its April meeting.” Overall, the feel that the main risks are Yen appreciation, a worsening European debt problem and the US and China slowing.