Home JPY strength likely to be short-lived – UOB
FXStreet News

JPY strength likely to be short-lived – UOB

Analysts at UOB Group are expecting USD/JPY to stay above 110 with the BOJ unlikely to contemplate any policy change in the near term, recent strength in the JPY is likely to be short-lived.  

Key quotes:

“However, price action is likely to be volatile as the rhetoric is digested and eventually downplayed, as it did during Jan – Feb when “BOJ tapering” first surfaced. Immediate and escalating concerns over global trade war with its negative impact on Japanese exports should keep the JPY biased on a weak note.”

“Since the first major block of USChina tariffs went live in mid-June, the USD/JPY has been tracking the US Dollar Index (DXY) higher in increasing correlation.”

“A revival of the US 10-year Treasury yield towards 3% after a month-long slumber between 2.80% and 2.90% should provide an additional lift for USD/JPY.”

“The JPY weakness also comes in a period where short JPY positions are gradually being rebuilt after being squeezed in 2Q18.”

“Overall, we reiterate our view of mild JPY weakness ahead and forecast USD/JPY at 110 in 3Q18, 111 in 4Q18, 112 in 1Q19 and 113 in 2Q19.”

FX Street

FX Street

FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions.