USD/JPY: Positive medium term outlook - Westpac

Robert Rennie, Research Analyst at Westpac, suggests that they remain torn between positive US$ fundamentals on the one hand and the potential for all out trade war/ increased EM volatility on the other.

Key Quotes

“The fact that, even in the midst of what has felt like a significant leg up in trade hostilities between the EU, US and China, USD/JPY could not even dip much below 109.50 is a positive; though the failure to extend beyond 111 warrants caution.”

“Thus we would rather seek safety in a neutral near term outlook but assume that the current trade storm will pass eventually, and hold onto a positive medium term outlook.”