Credit Agricole Sees 111.50 Yen as Tankan Beat Pales Before U.S.

The yen will test the weakest level
since January 2008 as expectations the Federal Reserve will
tighten monetary policy override an improvement in Japanese
corporate sentiment, according to Credit Agricole SA.

Japan’s currency may drop to 111.50 per dollar when the
Federal Reserve sets monetary policy on Oct. 29, said Yuji Saito, director of foreign exchange at Credit Agricole in Tokyo.
The level is the 50 percent retracement from the yen’s August
1998 low of 147.66 to its post World War II high of 75.35 in
October 2011, according to Fibonacci technical analysis.

The yen depreciated 0.3 percent to 109.93 per dollar as of
11:48 a.m. in Tokyo from yesterday, after earlier touching
110.09, the weakest since August 2008.

Japan’s currency “can easily accelerate its drop to 111,”
Saito said. The currency’s decline will “depend on how strong
the U.S. jobs data are,” he said.

Nonfarm payrolls rose 217,000 in September from the prior
month, Labor Department data will show on Oct. 3, according to
the median estimate of economists surveyed by Bloomberg News.

Traders see a 78 percent chance the Fed will raise its
target for overnight lending between banks by its September 2015
meeting, futures data compiled by Bloomberg showed yesterday.
That’s up from 73 percent odds seen on Sept. 1.

The Bank of Japan’s Tankan survey today showed the
sentiment index for the nation’s biggest manufacturers rose to
13 in September from 12 in June, beating the median estimate of
10 in a Bloomberg survey of economists.

Fibonacci analysis, based on the work of 13th century
mathematician Leonardo of Pisa, is founded on the theory that
prices rise or fall by certain percentages after reaching a new
high or low. Support refers to an area on a chart where orders
to buy are clustered.

To contact the reporters on this story:
Mariko Ishikawa in Tokyo at;
Hiroko Komiya in Tokyo at

To contact the editors responsible for this story:
Garfield Reynolds at
Naoto Hosoda

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Credit Agricole Sees 111.50 Yen as Tankan Beat Pales Before U.S.
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