JPY: Little to Prevent Additional Strength - BBH
Research Team at BBH, notes that the BOJ surprised and disappointed many
investors by not easing policy despite cutting its growth and inflation
“Preliminary evidence warns that the world's third-largest economy likely contracted in Q1 for the second consecutive quarter.
With even currency warriors now recognizing a high hurdle to intervention, there is little to prevent additional yen strength. The dollar is tested the JPY106.60 area before the weekend. It is a 38.2% replacement of the Abenomics-induced rally. Below there, many have their sights set on JPY105, which some see potential inflection point for potential BOJ intervention, and the 50% retracement target is near JPY110.60. Japanese participation will be light in the week ahead due to the Golden Week Holiday. Nearby resistance is seen in the JPY107.70-JPY108.20 area. It may require a move above JPY109.50 to stabilize the tone.”