USD/JPY to trade between 106.00 and 109.00 – MUFG
|Analysts at MUFG Bank, point out that the trade talks between the US and China continue to dictated the near-term sentiment around the Yen. They see the USD/JPY moving with a neutral bias over the next week.
Key Quotes:
“Multiple events around the work are propelling risk aversion moves, like the Hong Kong demonstrations, US-China trade war, and Brexit, and USD/JPY selling is likely to continue. Retail sales data due out on the 16th will be important to watch, given the sudden slump in the non-manufacturing ISM index and weak wage growth. Retail sales undershooting market expectations could push down on USD/JPY temporarily.”
“Widening USD/JPY basis shows that demand for the USD will be strong through year’s end. Outward investing unhedged for currency risk is likely to continue, so JPY selling by Japanese will likely support a lower bound for USD/JPY.”
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