USD/JPY: Uptick in the BoJ growth profile to be mildly supportive - Westpac

A very modest uptick in the BoJ growth profile ("Japan's economy is expanding moderately" vs "Japan's economy has been turning toward a moderate expansion“) and the official confirmation that Kuroda will not see the 2% inflation target during his tenor should be seen as mildly USD/JPY supportive, according to Robert Rennie, Research Analyst at Westpac.

Key Quotes

“We have tended to view dips in USD/JPY sub 110 as a buy on the basis that Japanese demand for foreign assets has been improving and we are forecasting the Fed to raise rates and taper before the end of the year.”

“To be sure, the risks of a steel trade war are there and N Korea/ ‘Russiagate’ risks remain a constant threat. However, we tend to see USD/JPY as well supported below 111.”