Japanese efforts to reverse the USD/JPY uptrend have been a little too successful, note ING FX analysts Francesco Pesole and Chris Turner.
USD/JPY will return to the 137/138 zone
“They exposed a ‘fast money’ community that had been exceptionally short Japanese Yen (JPY) in early July. And as is the case with carry trade strategies, a trend that had been brewing for years reversed in the blink of an eye. We believe positioning is better balanced now and that further decline will be orderly.”
“Our forecast is that USD/JPY will once again be driven by macroeconomic factors rather than position adjustments. Lower US growth and interest rates, plus the Bank of Japan on track for higher rates (next hike in October) should drag USD/JPY back to the 137/138 zone.”
“Further comments from Trump on the need for a weak USD are also a risk.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
