USD/JPY refreshes four-month low

The USD/JPY dropped to 110.62 in the last trading hour of the week as the latest headlines are suggesting that the healthcare bill will not pass the House. Amid a sudden risk aversion, the US dollar index fell to its fresh weekly low at 99.35.

Republicans in Congress said they lacked the votes needed for passage - RTRS

Following the initial slump, the USD/JPY was able to take back some of the losses and is now down %0.22 at 110.70. In the meantime, major U.S. stock indexes turned negative and sank to session lows minutes before the final outcome of the vote. Investors have been concerned about how the healthcare bill's potential failure might affect President Donald Trump's broader economic agenda, including tax reform, according to a recent Reuters report. 

Analysts at BNP Paribas suggest that 111.3 remains an attractive buy level (especially if the squeeze does not materialise) and they continue to expect USD/JPY to rise to 118.2 up to 123.7 by 3Q or 4Q17.