USD/JPY: Critical technical juncture in the near-term - MUFG
|Analysts from The Bank of Tokyo-Mitsubishi UFJ, see a neutral bias in the USD/JPY pair and warn that currently is near a key technical resistance.
Key Quotes:
“USD/JPY is currently trading just below key technical resistance at around the 110.00-level which if broken would likely prompt at least temporarily a reversal of the downtrend which has remained in place since late last year.”
“Recent more hawkish rhetoric from the Fed has lifted US yields offering more support for USD/JPY. It is also notable that risks assets (including a further increase in the price of crude oil) have held up well so far to the signal from the Fed that it plans to resume gradual rate hikes soon which if sustained should weigh on the yen.”
“However, Japanese exporters may sell US dollars ahead of the month-end dampening upside potential. PM Abe may pull some surprises in fiscal policy measures by introducing fiscal stimulus idea and postponing the sales tax hike once the current Diet session ends on 1st June ahead of the Upper House election on 10th July. Such moves could support the lower bound for USD/JPY at around 108.”
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