Analysts at MUFG Bank, continue to see that the main trend in the USD/JPY points to a stronger yen. They see the pair trading between 104.50 and 107.50 next week.
“Traders could take a wait-and-see stance ahead of the Kansas City Fed’s economic forum in Jackson Hole, Wyoming, next week. But falling US yields are keeping USD from gaining strength, and yen-buying driven by risk aversion also means big downside risk for USDJPY. USDJPY did dip to 105.05 at one point. Exporters and foreign bond holders (redeeming bonds) will be repatriating funds, and yen-buying flows could lead to USDJPY testing below the 105 level.”
“All eyes at Jackson Hole will be on whether Fed Chair Jerome Powell changes his stance. He had indicated after the July FOMC meeting that an easing phase has not begun, and further rate cuts are not likely. If he takes on a more dovish tone in August, US yields could decline and USD weaken. Headline risks surrounding the US-China trade war will also bear watching. Market liquidity is thin in August, and an unexpected big movement like the ‘Flash Crash’ over the New Year holidays, is a possibility.”
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.