Westpac analysts continue to expect USD/JPY to move in line with the broad US dollar trend into 2020.
Key Quotes
“Having appreciated since August, the past month or so has seen USD/JPY flatten out, with moves mirroring price action in the US 10 year bond. From JPY108.5 currently, we foresee the cross falling to a low of JPY105 in the second half of 2020 after the FOMC’s three cuts.”
“Come 2021 however, the USD/JPY trend is likely to turn again, with the pair rising back to JPY109 end-2021 after the FOMC goes on hold and US growth stabilises. From 2021, there is likely to be greater downside risk to the Japanese economy than the US amid still-soft global trade, a competitive Asian market place, and limited scope to ease monetary policy.”
“As per Sterling, risks for the Yen are skewed to the downside (higher USD/JPY) and are more likely to present in 2021 than 2020.”
Share
