USD/JPY: buy dips – Westpac

By FXStreet FXStreet (Guatemala) – Analysts at Westpac Banking Corporation offered USD/JPY has a high conviction trade.

Key Quotes:

“The BoJ’s surprise move on negative deposit rates is probably more potent in signaling what Kuroda might do in the months ahead than its practical impact on affected deposits. There is no guarantee banks will buy significant foreign assets in order to avoid an annual 0.1% cost.”

“But the move is a wake-up call for specs who were actually modestly short USD/JPY ahead of the meeting (CFTC data). USD/JPY ranges should remain well above pre-meeting levels, though 122-123 is likely to require greater confidence in the Fed’s plans to raise interest rates. Obviously Jan payrolls will be important but our US data surprise index suggests it isn’t the only potential upside surprise that could boost USD. Our long-standing bias remains to buy dips.”
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Source:: FX Street