Analysts at JP Morgan are bearish on USD/JPY and have put in a stop loss at 107.69 in their short trade on the currency pair.
Subdued outflow of funds from Japan, USD-bearish environment due to fiscal impasse in Washington and deteriorating US-Japan real yield differential are factors that are likely to drive the currency pair lower, analysts said.
The anti-risk Japanese yen is also undervalued, analysts noted and added that the dollar remains 6% rich to its long-term average despite its recent depreciation.
USD/JPY is trading largely unchanged near 105.72 at press time, having put in a low of 104.18 on July 31.
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