USD/JPY: Buy on dips - Westpac

Robert Rennie, Research Analyst at Westpac, suggests that they are reverting back to their previous ‘buy dips’ bias and suggests to look to buy dips 108/110, but expect USD/JPY to be capped by 112.00/50.

Key Quotes

“With round one of the French elections now behind us, reduced concern on the Korean peninsula and US equity markets back to recent highs, USD/JPY has quickly rebounded back to our one month target of 111.”

“We have stuck with a neutral bias for the last two weeks, concerned by rising risk aversion.”

“No change from the BoJ means we still have ongoing confusion over whether the BoJ is targeting ¥80tn JGB purchases or zero JGB yields.”