USDJPY: Bias back to neutral - Westpac

Robert Rennie, Research Analyst at Westpac has shifted their USDJPY bias back to neutral on the recent run up to 114.50, arguing that this move was overdone.

Key Quotes

“While much of the recent correction has been based on Trump/ FBI/ Russia risk aversion, price action since the dip back to 110.24 has been fairly muted.”

“This suggests that the US$ is the heavy leg here. I am surprised by the market’s reaction to the minutes and do expect to see some US$ strength through the end of next week into the FOMC. However, it’s hard to argue to step up and buy right here.”

“Thus we remain neutral for another week but would flip to a buy strategy on dips below 111.”