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.
For lots more FX trades from major banks, sign up to eFXplus
By signing up to eFXplus via the link above, you are directly supporting Forex Crunch.Get the 5 most predictable currency pairs