USD/JPY: Downside Risks, Intervention Expectations Around 105 - MUFG
USD/JPY: Downside Risks, Intervention Expectations Around 105 - MUFG
Analysts from The Bank of Tokyo-Mitsubishi UFJ see the USD/JPY
pair with a bearish bias, likely to trade between 105.50 and 108.50
during the next week. They affirmed that Japanese authorities remain
concern about the strengthening of the yen.
Key Quotes:
“Though
USD/JPY has pulled back from 105.55 to the 107 level, it may fall again
on weak USD momentum and less active JPY selling pressure after the
Golden Week holidays ahead of major company earnings reports in
mid-May.”
“USD/JPY would likely come back under downward pressure
in the event of a disappointing NFP report. At the same time, JPY
selling may not grow further as Japanese investors remain cautious and
maintain recent currency hedging levels.”
“Market expectations of
currency intervention by the MoF could support the 105 lower bound, as
even Prime Minister Abe has even commented on the yen’s recent
appreciation.”
