USD/JPY: 107.00 Gives Way, What's Next?
USD/JPY
has seen a break through 107.00 at the London open, although no much
follow through has been experienced so far, despite the momentum being
clearly in favour of the bears, with some chatter that GPIF-related bids
are resting sub 107 down to 106.70.
BoJ, FOMC disappointments = Yen bid to the boots
While
the pair may re-adjust higher further down the track on policy
divergence between the Fed and BoJ, short term, the pair has suffered
two major setbacks, as both the US and Japanese central banks
under-delivered in big style this week, despite the significant build up
of speculation for both to either act with more easing (in case of the
BoJ) or provide fresh clues on the next rate hike, if any (Fed).
USD/JPY has further downside room
Kathy
Lien, Co-Founder at BK Asset Management, thinks that once the April low
of 107.63 breaks (confirmed), "the next stop will be 106.65, the 38.2%
Fibonacci retracement of the 2011 to 2015 rally", she wrote.
Not all turned bearish USD/JPY...
Credit
Agricole shared its contrarian view on the USD/JPY, via eFXnews, noting
that "the policy divergence implied from our rates forecasts could push
USD/JPY at 116 by end-2016 and 121 by end-2017. However, when using the
consensus expectations, the result is a very gradual appreciation to
111 by end- 2016 and 119 by end-2017."
