USD/JPY: Downside Risks, Intervention Expectations Around 105 - MUFG

USD/JPY: Downside Risks, Intervention Expectations Around 105 - MUFG

5 May 2016, 17:55
Roberto Jacobs
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USD/JPY: Downside Risks, Intervention Expectations Around 105 - MUFG

Analysts from The Bank of Tokyo-Mitsubishi UFJ see the USD/JPY pair with a bearish bias, likely to trade between 105.50 and 108.50 during the next week. They affirmed that Japanese authorities remain concern about the strengthening of the yen.

Key Quotes:

“Though USD/JPY has pulled back from 105.55 to the 107 level, it may fall again on weak USD momentum and less active JPY selling pressure after the Golden Week holidays ahead of major company earnings reports in mid-May.”

USD/JPY would likely come back under downward pressure in the event of a disappointing NFP report. At the same time, JPY selling may not grow further as Japanese investors remain cautious and maintain recent currency hedging levels.”

“Market expectations of currency intervention by the MoF could support the 105 lower bound, as even Prime Minister Abe has even commented on the yen’s recent appreciation.”


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