USD/JPY still bearish near term – Westpac

By FXStreet Spot could meet further downside pressure in the upcoming weeks, suggested strategists at Westpac.

Key Quotes

“We shift back to a bearish USD/JPY bias, the catalyst being the ‘shock’ no change from the BoJ”.

“We remain confused by the outcome – Japan officially moved back into deflation last month, the BoJ FY16 inflation forecast was revised down to 0.5% from 0.8% in Jan and 1.4% in Oct 2015 while forecasts for to return to 2% were pushed back to FY17 (from first 1/2 FY17 in Jan and 2nd 1/2 FY16 in Oct 201)”.

“Given that Kuroda’s 5yr term ends in April 2018 the risks are he never sees his objective hit, after 5yrs of aggressive QE”.

“We remain of the view the BoJ will announce more QE but the timing has been pushed out to June/July”.

“No clear coordinated growth plan from the G7 leaders’ summit May 26/27 could push USD/JPY to 100/103. We stick with a bearish view for another week”.
For more information, read our latest forex news. …read more

Source:: FX Street