USDJPY: Just a matter of time before the pair breaks below 100 - Westpac

Robert Rennie, Research Analyst at Westpac, suggests that they maintain a negative outlook for USD/JPY and see it as just a matter of time before the pair breaks below 100.

Key Quotes

“Two factors we will be watching closely over the next couple of days: the BoJ’s intended JGB purchases for October to be released tomorrow and the BoJ 10 day account statement which should be released Tuesday next week.

I am working off the assumption that the BoJ is preparing to move towards a ‘taper-lite’ world. While the last set of BoJ accounts probably exaggerated the transition, seeing such a large drop in BoJ JGB assets ahead of a very fundamental shift in BoJ monetary policy is at least very curious.

If confirmed early next week, it should add to USD/JPY downside risks.”