BNP Paribas continues to favor USD/JPY upside.
"We expect US yields to continue to adjust upwards, while long JPY positioning remains large at +27. In addition, BNP Paribas STEER this morning triggered a bullish STEER trading signal targeting 124.27," BNPP advises.
"It is interesting to note that rates market price action suggests the market views the USD gains following the BOJ’s move as likely to further curtail Fed appetite for rate hikes, a view which was supported by Dallas Fed President Kaplan’s comments that the Fed was mindful of the effects of BOJ stimulus on the USD. We would point out, however, that the JPY has only a modest weight in the Fed’s TWI," BNPP argues.
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