25 Feb 2016
USD/JPY still a ‘buy on dips’ – Westpac
Strategist at Westpac Robert Rennie has reiterated that pullbacks towards 112.00 remain a buying opportunity.
Key Quotes
“We have stuck with the view that USD/JPY was a buy on dips to 112 with a stop below 110”.
“However, price action is poor and the combination of weak crude, modestly higher
China fi xes and a softer run of US data this week hardly creates a backdrop for a rapid weakening in the ¥”.
“We stick to the view for another week however. Japanese data should underwhelm versus expectations and adds to the case that the March 14/15 BoJ meeting (ahead of FOMC March 16) may offer more compelling ¥ guidance than the market thinks”.
“We thus stick with a buy on dips to 112 with a stop below 110 strategy for another week”.
Key Quotes
“We have stuck with the view that USD/JPY was a buy on dips to 112 with a stop below 110”.
“However, price action is poor and the combination of weak crude, modestly higher
China fi xes and a softer run of US data this week hardly creates a backdrop for a rapid weakening in the ¥”.
“We stick to the view for another week however. Japanese data should underwhelm versus expectations and adds to the case that the March 14/15 BoJ meeting (ahead of FOMC March 16) may offer more compelling ¥ guidance than the market thinks”.
“We thus stick with a buy on dips to 112 with a stop below 110 strategy for another week”.