USDJPY: Attracted to longs below 110 - Westpac

Robert Rennie, Research Analyst at Westpac suggests that they remain attracted to longs below 110 for USDJPY pair amidst the ongoing macro developments on the global front.

Key Quotes

“We have sat on a neutral bias for the last 4 weeks though flipping to a buy sub- 110. That’s been on the basis that yield support for the US$ was waning, that the ‘Russia-gate’ issue was a source of ¥ support, that JGB yields were ‘sticky’ due to lack of BoJ clarity on the APP and that Japanese investors had been heavy sellers of foreign assets.”

“Outside of any unexpected Comey developments, the focus should turn to next week’s FOMC. Given bond and FX markets have been ‘fighting the Fed’ for weeks now, we would expect to see a bit of US$ strength return even if only to 2pm EST June 14. Thus we remain attracted to longs below 110.”