Robert Rennie, Research Analyst at Westpac, suggests that they have stuck with a neutral bias for the last 3 or 4 weeks for the USD/JPY pair though with the strong caveat that they would switch to a buy on dips to 110.50/111.00.
“This view was on the basis that Japanese investors would tend to use higher yields and a stronger ¥ as a buy opportunity.”
“We were clearly very correct view on our Japanese investor view – Japanese investors bought the most US bonds in 2 years in Sep - and thus too cautious on our level to buy the dip.”
“At the risk of remaining too cautious, we will keep our neutral bias for another week given that impetus for a sharply higher USD does not seem to be present right now. However, we would shift our buy level up to 112.50/113.”
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