Robert Rennie, Research Analyst at Westpac, points out that they have stuck with a positive bias on USD/JPY for a number of weeks now and this was based on the assumption that US data momentum will build into end year, that we will see enough progress on the budget/ tax bill to support the US$ yet further and that the Fed chair announcement adds a bit of weight to the above too.
“USD/JPY has made little in the way of gains above 114.50 as yield spread support has waned in the longer end. We tend to focus more on the front end of the curve though and there yield spreads are increasingly supportive.”
“Thus we stick with our bullish call for another week.”
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