USD/JPY could climb as high as 142.00 this month – Credit Suisse
|USD/JPY broke below 135.00 on Wednesday. Still, economists at Credit Suisse now leave room for USD/JPY to rise to as high as 142.00 this month, in case the Bank of Japan maintains rigid adherence to YCC at its Friday meeting.
Risk reversal skews are becoming bid for JPY calls
“It’s very understandable why risk reversal skews are becoming bid for JPY calls and implied USD/JPY volatility is rising, even as spot pushes still higher.”
“We now leave room for USD/JPY to rise to as high as 142.00 this month, in the case where Kuroda maintains his rigid stance on Friday. But we still maintain our 4 May view that 125.80 is a range low rather than raise that too, as a shift in stance on YCC (be it a higher target level or a shorter duration as target) could be a catalyst for a step shift lower and a new narrative for JPY.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.