USDJPY seen range-bound circa 105 in near term - Barclays

The Barclays Research Team offers the 3-month directional view for the Japanese Yen, in its latest client note.

Key Quotes:

“Stability in broad USD dynamics and fading prospects of early BoJ normalization are likely to leave USDJPY range-bound around 105 in the near term.

We delayed our expectations for BoJ normalization (ie, shifting of its YCC target from 10y to 5y) by six months, to April 2019.

While dip-buying demand from Japanese investors provides some support for USDJPY, we expect the pair to eventually break lower, toward 99, by Q1 19 on the back of fragile global risk sentiment and solid domestic fundamentals and external balance, as well as pricing of eventual BoJ normalization in FY 19.”