USD/JPY: Investors Bought The Dip In March & April; What’s Next? – BofA

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USD/JPY has been steady in recent months. What is the structural bais for the currency in the coming months?

Here is their view, courtesy of eFXdata:

Bank of America Global Research maintains a structural bearish bias on USD/JPY over the coming months.

“Lockdown in key foreign economies led to deterioration of Japans current account balance in March and likely in April while investors may have bought USD/JPYs dip. These factors probably mitigated downward pressure on USD/JPY in March,” BofA notes. 

“Going forward, (1) a low oil price, (2) bottoming out of exports, (3) slowdown in outward M&A, and (4) the unattractive level of unhedged foreign bonds, should be supportive of JPY,” BofA adds. 

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Kenny Fisher - Senior Writer A native of Toronto, Canada, Kenneth worked for seven years in the marketing and trading departments at Bendix, a foreign exchange company in Toronto. Kenneth is also a lawyer, and has extensive experience as an editor and writer.