JPY: Most future paths point towards a stronger yen – ING

Sandeep Kanihama FXStreet Contributor

Analysts at ING point out that the USD/JPY remains highly sensitive to the changing geopolitical environment and expect the pair to remain sensitive to incoming headlines on US-China trade ties and EM geopolitics.

Key Quotes

“While news of US-China trade talks has partially lifted risk sentiment, trading hopes of a better political world have proved to be unfruitful so far this year.”

“With US leading activity indicators starting to soften, we see most future paths pointing towards a lower USD/JPY – and the pair crossing the 110 psychological level could be a strong confirmation of this.”

“The domestic story has also been marginally supportive for the yen – not least since the Bank of Japan's subtle hawkish tweak last month. The idea of 'stealth tapering' has also spread to the central bank's ETF purchases – with commentators noting the central bank has been less on hand to curb recent stock market volatility.”

“We feel the yen has reverted back to exhibiting its usual safe-haven characteristics in a fragile environment and we expect the currency to remain the markets' preferred safe-haven vehicle.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

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