Analysts at MUFG Bank, hold a neutral bias of the USD/JPY pair in the short-term and see no changes from the Bank of Japan, considering the current levels of the Yen.
“USD/JPY is up but is unlikely to rise further. The FOMC is expected to cut interest rates by 25bps next week. This has already been priced in. Fed Chair Powell has not offered any particular hints. Because of this, all eyes are on the dot chart. The markets have priced in two rate cuts this year, including one next week, so if the year-end median price indicates a halt to rate cuts, then this would probably support higher US long-term rates. Yet the stock market’s expectations for monetary easing have been off and weaker stock prices would support a stronger JPY.”
“We do not expect any big movements in USD/JPY. After the July rate cut, Chairman Powell denied that the Fed had embarked on an easing cycle. The comment prompted President Trump to take an even harder line against China.”
“Next week, not only any comments by President Trump, but also quieting geopolitical risks will bear watching. The BoJ will probably not make any policy changes at current USD/JPY levels.”
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.