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21 May 2015
USD/JPY looks range-bound – TDS
FXStreet (Barcelona) - FX Strategists at TD Securities expect USD/JPY to remain within its broad range until the June FOMC.
Key Quotes
“As for USDJPY, we ultimately expect that central bank divergence will be the dominant driver of this currency pair—either through additional BoJ stimulus or an inevitable Fed hike—once markets get through the policy vacuum with the Federal Reserve over the next four weeks.”
“USDJPY has already put in some work to the upside, fading the Q1 GDP beat earlier this week as much of the lift was due to inventory accumulation (though we would note that consumer spending has been decent over the past three quarters).”
“But USDJPY still feels range-bound to us as we do not see a catalyst to trigger further JPY weakness and pull us out of the multi-month range at least to the June FOMC; the BoJ rate decision this week should be a non-event as it was barely a month ago that the last meeting was held.”
“BoJ watching will become more interesting in the summertime when we should start to see the follow-through of wage and traded goods inflation following the annual spring negotiations.“
Key Quotes
“As for USDJPY, we ultimately expect that central bank divergence will be the dominant driver of this currency pair—either through additional BoJ stimulus or an inevitable Fed hike—once markets get through the policy vacuum with the Federal Reserve over the next four weeks.”
“USDJPY has already put in some work to the upside, fading the Q1 GDP beat earlier this week as much of the lift was due to inventory accumulation (though we would note that consumer spending has been decent over the past three quarters).”
“But USDJPY still feels range-bound to us as we do not see a catalyst to trigger further JPY weakness and pull us out of the multi-month range at least to the June FOMC; the BoJ rate decision this week should be a non-event as it was barely a month ago that the last meeting was held.”
“BoJ watching will become more interesting in the summertime when we should start to see the follow-through of wage and traded goods inflation following the annual spring negotiations.“