AUD/JPY to trade at 79 by end-2020 – Westpac
|AUD/JPY jumps 20 pips to trade above the 76 level on Tuesday. Economists at Westpac see limited downside risks for the aussie against the yen and forecast the pair at 77 by September and at 79 by year-end.
Key quotes
“The Japanese yen continues to show limited sensitivity to risk appetite, though admittedly it hasn’t been tested often in recent weeks. But price action so far in 2020 suggests reduced downside risk on AUD/JPY on any return to turbulence in coming weeks and months.”
“In terms of containing Covid-19, both Australia and Japan are dealing with renewed outbreaks but our baseline economic forecasts assume Asia’s recovery is intact and that Australia’s economy will rebound faster than Japan’s.”
“Meanwhile, the BoJ has ramped up its balance sheet expansion since March. So the relative QE trend looks to be supportive of AUD/JPY, if partly in perception.”
“Our baseline forecasts are 77 in September and 79 by December.”
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