USD/JPY won't hold at 100 - Deutsche Bank
You are missing trading opportunities:
- Free trading apps
- Over 8,000 signals for copying
- Economic news for exploring financial markets
Registration
Log in
You agree to website policy and terms of use
If you do not have an account, please register
Deutsche Bank on USD/JPY
The USD/JPY has been repeatedly seeking a bottom value at under 100. Japanese export firms are gradually increasing USD selling as hedges for OctDec following completion of the "obon" summer holidays. These firms will lower internal USD/JPY benchmark rates that had been at 105 or 110 to the 100-105 range. This change is pushing the USD/JPY toward 100, and we expect a market cap at around 100 after taking hold in the 90 range.
The 100 level is an important technical threshold and has worked as a support for the USD/JPY to now. We see there could be some institutional investors buying foreign securities on the dip and retraction of existing hedges (dollar short) to take profits at around 100. Additionally, some speculative yen bulls also might unwind the short positions with the 100 level as a target.
Yet we do not expect the USD/JPY to hold at the 100 level for an extended period because US economic activity lacks momentum and Japanese hedgers are behind in USD selling. We do not think BoJ policy is capable of providing a sustained lift to the USD/JPY unless improved US economic activity fuels expectations for multiple policy rate hikes while the USD/JPY's median level remains above 100.
Our official USD/JPY forecasts are 97 at end-September and 94 at end-December.
source