13 Aug 2015
USD/JPY eyes 130.00 in Q1 2016 – BAML
FXStreet (Edinburgh) - In the view of analysts at BAML, the pair could remain within the recent range in the upcoming months before heading higher at the beginning of 2016.
Key Quotes
“In light of (1) the acceleration of the US economy and rise in short-term yields, (2) the possible downward revision of the BoJ’s bullish price outlook down the road, and (3) the BoJ’s asymmetrical stance on policy responses, we continue to see a gradually higher USD/JPY trajectory”.
“The range is likely to transition into USD/JPY125-130 into 1H16 as we forecast USD/JPY to rise to 125 by year-end and beyond in 1H16”.
“The first risk is that the Abe administration's support rate falls further and the administration gives up on the security issue”.
“The second risk is the Abe administration's support rate continuing to fall, to well below the danger zone of 30%. If such risks emerge, the Abe administration collapsing would no longer be merely a tail risk, and the markets would price this in as weaker share prices and a stronger JPY”.
Key Quotes
“In light of (1) the acceleration of the US economy and rise in short-term yields, (2) the possible downward revision of the BoJ’s bullish price outlook down the road, and (3) the BoJ’s asymmetrical stance on policy responses, we continue to see a gradually higher USD/JPY trajectory”.
“The range is likely to transition into USD/JPY125-130 into 1H16 as we forecast USD/JPY to rise to 125 by year-end and beyond in 1H16”.
“The first risk is that the Abe administration's support rate falls further and the administration gives up on the security issue”.
“The second risk is the Abe administration's support rate continuing to fall, to well below the danger zone of 30%. If such risks emerge, the Abe administration collapsing would no longer be merely a tail risk, and the markets would price this in as weaker share prices and a stronger JPY”.