MUFG Research discusses USD/JPY outlook and sees a scope for a move towards 130-level ahead of 135.
“The yen has continued to weaken sharply during the Asian trading
session with USD/JPY on course for its thirteenth consecutive higher
daily close. It would be the longest run of losses since the Bloomberg price data started in 1971.
Yen weakness has been reinforced by further hawkish comments from Fed
officials which continue to widen the expected policy divergence between
the BoJ and the Fed,” MUFG notes.
“It leaves the yen vulnerable to further weakness in the near-term with no clear fundamental trigger to prompt a reversal of the current bearish trend.
Market participants will be increasingly targeting the 130.00-level for
USD/JPY and then beyond the highs from in early 2002 at just above the
135.00-level. The latest IMM report highlights clearly that
speculative yen selling has been ramped up in anticipation of further
weakness,” MUFG adds.
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