Robert Rennie, Research Analyst at Westpac, suggests that they are stuck with a neutral near term bias on USD/JPY for the last couple of weeks after the recent move above 111 on the basis that the pair was extended, risk aversion was rising and the risk of trade wars all pointed towards consolidation.
Key Quotes
“A couple of weeks ago we shifted to a more upbeat 1-3mth view on the basis that yield support should eventually win through.”
“We stick with this mixture for another week – in the near term it feels as if the 108 to 111 range is well defined. However, we do see a break higher in the months ahead.”
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