The Bank of Japan triggered a “mini taper tantrum” with its tests. In addition, the news about China’s intention to slow buys of US Treasuries also played its part in pushing USD/JPY lower. What’s next?
Here is their view, courtesy of eFXnews:
BTMU FX Strategy Research discusses USD/JPY outlook and notes that the JPY is the biggest mover in the G10 FX space today as the market continues to respond to the BoJ decision to cut longer-term JGB purchases.
“After Governor Kuroda made efforts to reverse the speculation of a policy adjustment, which was starting to succeed, the cut in purchases are rekindling that speculation again.
The BoJ has been tapering for some time – this carrying on this year is one factor behind our view that the yen is likely to strengthen further, dropping to levels below 110.00 versus the dollar,” BTMU argues.
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