USD/JPY: Awaiting Fresh Triggers; Next Week's Range & Outlook - BTMU
The following is USD/JPY range and outlook for next week as provided by Bank of Tokyo-Mitsubishi UFJ (BTMU).
USD/JPY – NEUTRAL BIAS – (115.50-119.00)
The market expectation for US economic recovery and the Fed’s rate hike continued to support the US dollar buying. Next week, the lower bound of USD/JPY is supposed to be steady. However, after the FOMC for monetary policy normalization, the US treasury yield was lowered further. The global financial repression pressure covered the US treasury yield overall and weakened the US equity market momentum. Those will support JPY buying. The present US treasury-JGB yield gap will unlikely support USD/JPY buying.
The weak US economic indicators may support the US dollar selling. December ISM data was worse than the market consensus, though improving to 55.5. In addition, if the wage growth in non-farm payroll weaker, the US dollar selling may support JPY buying.
