Home USD/JPY: Neutral N-Term; Japanese Investors Unlikely To Take FX Risk Ahead Of Golden Week Holidays – MUFG
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USD/JPY: Neutral N-Term; Japanese Investors Unlikely To Take FX Risk Ahead Of Golden Week Holidays – MUFG

Dollar/yen has been moving up on a better market mood. What’s next?

Here is their view, courtesy of eFXdata:

MUFG Research discusses USD/JPY outlook and adopts a  neutral bias  , expecting the pair to trade in a 1110-113 range  in the near-term.

“USD/JPY has remained flat since the last week of March after rising. But the real effective USD/JPY exchange rate reflects a weakening JPY. The lower bound for USD/JPY is firm. Japanese investors net-bought JPY1.2 trillion of overseas securities the last week of March, mostly medium- and long-term bonds. Japanese investors built up their overseas bond positions at the end of the fiscal year,” MUFG notes.

“JPY rates have started to rise slightly in FY19. Japanese investors have been realizing their valuation gains as JPY yields fell in Q1 2019. They seem to be buying overseas bonds after taking the gains. But  Japanese investors are unlikely to actively take currency risk ahead of the 10-day Golden Week holidays.  The ECB meets next week and is unlikely to change its decision and to shake USD/JPY  just after the adjustment last month. USD/JPY will likely lack firm direction,” MUFG adds.

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Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.