USDJPY: Neutral bias for the week - Westpac

Robert Rennie, Research Analyst at Westpac, suggests that with the BoJ, budget and cabinet reshuffle out the way, there is not that much to look forward to this week from an event risk point of view for USDJPY.

Key Quotes

“Into the BoJ we consistently warned that expectations were too high and that the risks of a correction back to and through 103.50 were clear. However, the speed and size of the correction caught out even our bearish views, and it is not now obvious what really helps to stabilise USD/JPY north of 100.

Sure, a stronger NFP outcome would help, and a rebound in the Nikkei towards 17,000 the same. However, with BoJ watchers having to wait until September’s “comprehensive review” and no obvious guidance as to what may eventuate from this, we switch back to a neutral bias after a ‘buy on dips sub 103.50’ bias last week."