Robert Rennie, Research Analyst at Westpac, suggests that they have argued for some time now that the ebb and flow of risk events should be “enough to keep USD/JPY in a 110/112 range over the next few weeks.”
Key Quotes
“We still hold out hope for higher levels for the pair over the next month or so” on the basis that the Fed will likely rate for the 4th time in Dec; yields will break higher (eventually) and this should be enough to offset mid-term/ twin deficit/ geopolitical US$ negatives.”
“While USD/JPY has not really been able to garner much support from the rising yield spread, we see this more of a matter of time. Thus we shift our weekly bias to up; keep the 1m unchanged but shift the 3m back to neutral.”
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