Home USD/JPY: Further gains are not assured – Westpac
FXStreet News

USD/JPY: Further gains are not assured – Westpac

Sean Callow, Research Analyst at Westpac, suggests that the price action of USD/JPY pair may be gentle but 2 month highs this week are encouraging for Westpac’s long-standing medium term view that the sustained rise in US yields along the curve will attract enough unhedged demand for US bonds to underpin a return to the late 2017 levels around 113-114.

Key Quotes

“The US 10 year treasury note yield pop to 3.09% this week was a high since May, supporting USD/JPY even as the dollar struggled on other pairs.”

“Further gains are not assured however around the FOMC meeting, with fully priced rate hikes sometimes seeing profit-taking on USD longs. The “dot plot” will be closely watched.”

“Meanwhile in Tokyo, we saw more of the same from the BoJ – the very credible pledge to keep the 10yr JGB around 0% and the rather incredible claim that the amount of JGBs purchased “will increase at an annual pace of about 80 trillion yen”.”

 

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.