USD/JPY could drop to 105.00 on a 3M view

In view of its safe-haven status, movements in the Japanese Yen often appear more focused on events outside its border than domestic news, point out Rabobank analysts. They see risks in USD/JPY tilted to the downside.

Key Quotes:

“The two oil linked currencies have taken the lead over the safe havens for now. While the NOK and CAD can be expected to continue taking their cue from the outlook for oil prices this week, the safe havens JPY and CHF will be more focused on the geopolitical implications of the Saudi attack.”

“Decisions taken by the Trump Administration is relation to trade with China and with respect to Iran are likely to have significant implications for safe have assets which could either support or counter the BoJ’s policy objectives.”

“In spite of periodic bouts of safe haven demand for the JPY, the fact that Japan’s effective exchange rate is still trading only modestly above multi-decade lows does imply that the BoJ’s extremely lose policy conditions has had an impact on softening domestic monetary conditions. That said, in recent months USD/JPY has been biased lower mirroring a reduced level of risk appetite.”

“Given the current geopolitical risks in addition to the slowdown in world growth, we see risk that USD/JPY could be headed towards the 105.00 area on a 3 month view.”

Share: Feed news

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. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.