USD/JPY: We continue to see the potential for further upside

Analysts at Rabobank continue to favour the US dollar over the Japanese yen as a safe haven in this current crisis and they see scope for a move in USD/JPY towards 132.00 on a one to three-month view, assuming the Federal Reserv hikes interest rates at an aggressive pace in the coming months and that the Bank of Japan retains an extremely dovish policy position.

Key Quotes:

“Despite the pressure on the trade balance, Japan’s current account recorded a second straight surplus in March, proving that investment income into the country can still outweigh the impact of surging energy and commodity costs. The better than expected current account release helped restore confidence in the JPY’s safe haven status and coincided with a dip lower in the value of USD/JPY towards the end of last week. We continue to favour the USD over the JPY as a safe haven in this current crisis and see scope for a move towards USD/JPY132.00 on a 1 to 3 month view. This view assumes that the Fed hikes interest rates at an aggressive pace in the coming months and that the BoJ retains an extremely dovish policy position.”

“While better Japanese current account data and a bout of short-covering has pushed USD/JPY away from its recent highs, we continue to see the potential for further upside over the summer as the Fed continues to hike rates. Assuming an improvement in Japanese economic data, speculation of a potential alteration to the BoJ’s YCC policy has the potential to rein back USD/JPY into the autumn.”

Share: Feed news

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. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.