USD/JPY to extend its rally towards the 110.97 March high – Westpac

Economists at Westpac had been holding out for an opportunity to sell above 110 – however, this move has further to go near term with a retest of the March high at 110.97 on the cards.

Where is heading the USD/JPY pair?

“The combination of an enormous downside surprise for Wall Street economists on the April Nonfarm payrolls report followed by a just as enormous upside surprise on the April CPI report emphasises that the near term outlook for the US$ remains super clouded.” 

“It’s pretty obvious that we have witnessed another ‘gotcha’ moment for the growing number of ‘inflationistas’ out there. And it’s hard not to see the market running with this theme for the foreseeable future.”

“Last week we argued for a push back to the 109.50/110 level before considering selling. Clearly, the risks is that this move extends further with a likely break above the previous high at 110.97 on the cards.”

“A break above the 110.97 level would point to an extension towards 112.25 as an objective.”