A snippet from a note out of Japan on the yen for the new week ahead.
This via MUFG:
- a neutral bias for next week
- forecast range is 106.50 / 109.50
Their Bank of Japan outlook:
- will likely stay the course on monetary policy
- no surprises
Also next week of course is the Federal Open Market Committee. MUFG outlook:
- expect cut by 25bps
- this has already been priced in
- thus unlikely to have much impact
At Powell's following news conference:
- may strike a neutral stance in his comments
- but this depends on any political pressure
"US Treasury yields would support a stronger USD, and the 109.00-level could come into view.
expectations of more easing are diminishing
High-level talks between the US and China will be important, but are not likely to impact USD/JPY much.
Japanese investors have been buying foreign bonds with JPY forward hedges. Negative yields will probably keep supporting their foreign bond buying.
