JPY to take cues from BoJ – Westpac

According to Robert Rennie, head of FM strategy at Westpac, the BoJ will be the main event for the JPY, though no change in policy is expected.

Key Quotes

“Given this is a quarterly outlook meeting, it will be what the BoJ does with its forecasts and how it talks to both the domestic and international issues the economy faces. Increasing downside risks to inflation and growth present a challenge to the BOJ.”

“In the last couple of sessions, we have started more clearly testing the downtrend that USD/JPY has been in since mid December. Daily technical indicators (MACD/ RSI) have started to more clearly point up and this leaves us more optimistic in the near term that we should see this recovery move continue.”

“However, bounces should be limited above 110 given the very range bound nature of the US$ at the moment and elevated political risks e.g. Brexit, France, US Government shutdown etc.”