18 Dec 2014
USD/JPY: Neutral bias for next week – BTMU
FXStreet (Guatemala) - A collective of analysts at The Bank of Tokyo-Mitsubishi UFJ, Ltd. Expect a range of 117.00-121.00) for the week ahead.
Key Quotes:
“The Fed clearly presented its will to normalize their monetary policy stance. The market anticipation for the US and Japan yield gap widening has grown further in favour of US dollar buying. The pace of Fed rate hikes in 2015 is expected to be more gradual which supported equity buying also lifting USD/JPY as well”.
“The lower bound of USD/JPY was recently confirmed at 115-level, supported by US dollar purchases from Japanese importers and investors. Yen direction in the near-term is being driven by developments in Russia which have boosted safe haven demand for the yen”.
“While we do not expect this relationship to prove sustainable, there is still a risk that the yen could strengthen further in the near-term if the currency crisis in Russia continues to escalate”.
“Year-end flows will also begin to become more important in driving yen direction in less liquid market conditions”.
Key Quotes:
“The Fed clearly presented its will to normalize their monetary policy stance. The market anticipation for the US and Japan yield gap widening has grown further in favour of US dollar buying. The pace of Fed rate hikes in 2015 is expected to be more gradual which supported equity buying also lifting USD/JPY as well”.
“The lower bound of USD/JPY was recently confirmed at 115-level, supported by US dollar purchases from Japanese importers and investors. Yen direction in the near-term is being driven by developments in Russia which have boosted safe haven demand for the yen”.
“While we do not expect this relationship to prove sustainable, there is still a risk that the yen could strengthen further in the near-term if the currency crisis in Russia continues to escalate”.
“Year-end flows will also begin to become more important in driving yen direction in less liquid market conditions”.