FXStreet (Edinburgh) – Senior Currency Strategist at Rabobank Jane Foley sees the pair in a consolidative range in the near term.
Key Quotes
“Since Kuroda last week stated that QQE will continue until CPI is stable at 2%, it could be inferred that the BoJ’s enormous asset purchase programme may be pared back during the course of next year”.
“That said, there is considerable uncertainty in the market as to whether the 2% inflation target can be maintained next year even with the huge QQE policy running at full pelt”.
“The market has maintained the view that the BoJ’s QQE programme will be expanded later this year – though these expectations have recently lost momentum”.
“Expectations regarding BoJ policy will be crucial in guiding USD/JPY in the coming months”.
“While Kuroda has played down his recent remarks about the weakness of Japanese effective exchange rate we view the soft yen as playing an instrumental part in boosting inflation”.
“That said, Kuroda’s remarks have served to strengthen the USD/JPY 125.00 psychological resistance level and we expect further consolidation around recent levels in the coming weeks”.
(Market News Provided by FXstreet)