USD/JPY: Negative bias for the month - Westpac

Robert Rennie, Research Analyst at Westpac, suggests that they have stuck with a negative view on USD/JPY for the last month or so on the basis that the ¥ is cheap; the US$ has not been able to garner much support from Fed expectations and risk sentiment is under pressure.

Key Quotes

“The recent move towards a much more hawkish trade agenda from the Trump administration has arguably developed into another reason to expect further ¥ strength near term.”

“Thus we remain of the view that risks remain to the downside for USD/JPY over the coming month.”

“However, gold is not exactly reflecting a sense of heightened tension around the world and there remains a sense that the 105 level could be seen as something of a ‘line in the sand’. This may be a factor that is preventing a break lower.”