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The Japanese yen received some safe haven flows on the cancellation of the Trump-Kim Summit. What’s next? Here is the view from CIBC.

Here is their view, courtesy of eFXdata:

CIBC Research discusses USD/JPY outlook and adopts a  structural bearish bias targeting the cross at 104 by year-end.

With USDJPY well linked to government bond spreads in the last two years,  the yen should be a beneficiary of any upward pressure on JGBs  emanating from a less-dovish tone at the BoJ.

Indeed,  after seeing net JPY shorts advance for five straight weeks into early May, a scenario not seen since 2016, we remain wary of recent flows running out of momentum.

That should also help fuel a correction in USDJPY, adding to ammunition from anticipated positive economic developments.  Overall, we target USDJPY reaching 104 by the end of the year,” CIBC argues.

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