USD/JPY to continue probing the 104/105 region - Westpac

Robert Rennie, Research Analyst at Westpac, suggests that the US$ clearly has wind in its sails and this should be enough for USD/JPY to continue probing the 104/105 region.

Key Quotes

“However, we remain of the view that the BoJ switched into YCC mode from QQE for good reason - that the availability of JGBs within domestically licenced banks is limited. As this becomes more obvious through reduced BoJ buying of JGBs, we should see this cap USD/JPY.

On top of this, the last Tokyo CPI ex-fresh food & energy was disappointing, adding to risks the CPI target is again pushed back at the end of the month.

Bottom line, we hold a neutral bias for another week but shift our 1m target to 102, being the middle of the 100/104 range.”