Buy USD/JPY with target at 112.75 - Westpac

Analysts at Westpac offered a trade plan to buy USD/JPY.

Key Quotes:

"Entry: Buy 100% at 110.15, Stop: 109.30, Target: 112.75

• Rationale:
• As noted above, USD has unwound the bulk of its post-election rally;
• The BoJ has reiterated its commitment to Yield Curve Control and stated that a soft JPY is supportive for their inflation targeting;
• Risk appetite has not been materially impacted and solid global growth prospects remain in place;
• Positioning unwinding into month and quarter end should provide opportunities to re-establish JPY shorts;
• Key risk is that the House Freedom Caucus might try to leverage the debt ceiling and government shutdown risks to achieve their policy goals;
• Yet  another example of Republican party dysfunction would damage risk appetite and generate yet more doubts about Trump stimulus but that is not a story for markets until mid-April, just before the continuing resolution runs out 28 April.