USD/JPY: Heavy selling wave has largely passed - TDS

Sandeep Kanihama FXStreet Contributor

Mazen Issa, senior FX strategist at TD Securities, suggests that at the moment, they think the wave of heavy selling in the USD/JPY pair has largely passed, but still expect the pair to trade with a heavy tone on the basis that equity repatriation will continue by the domestic investor base.

Key Quotes

“We expect this to remain a feature in the coming weeks as Japanese FY-end comes into view and capital preservation will become a motivating factor.”

“Though markets may be too extreme in their view on pricing in a chance of a cut this year, diminished Fed leadership vis-a-vis market pricing should also act as a weight for USDJPY. This, alongside compressed 10yr UST/JGB spreads should keep the pair anchored.”

“We turn more tactical and favor a sell-on-rallies posture for USDJPY, with 108.70 acting as a notable resistance marker. On the downside, we expect 105 to act as formidable support.”

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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