USD/JPY: Downside risks significantly reduced - Westpac

Robert Rennie, Research Analyst at Westpac, suggests now that Japanese officials appear to have found a voice, it does feel as if the downside risks for USD/JPY have been signifi cantly reduced.

Key Quotes

“However, with the G7 deputies (May 20/21) and leaders’ summit (May 26/27) approaching, would Japan really intervene? We doubt it very much, though commentary has been well timed and enough to drive a 50% correction of the aggressive losses post the BoJ meeting late
April.

The summary of opinions for the April meeting, released yesterday, suggested a ‘watch now; act if needed’ type approach, though no members called for an April easing. We would expect to see more neutral trading for USD/JPY for the week ahead as we move to establish a new 108/109.50 range. We shift back to a neutral bias.”