USD/JPY: Dips should be limited - Westpac

Robert Rennie, Research Analyst at Westpac suggests that they have stuck with the view that risk aversion dips in USD/JPY pair should be limited to the April/ June lows i.e. mid to late 108s.

Key Quotes

‘That theme has worked well for now, though with North Korean tensions still smouldering and a very uncertain near term outlook for the political situation in the US, it’s hard to see a compelling argument for a bounce in USD/JPY.’

“With gold camped out just below $1300, the risks still appear to be there for further near term weakness.”

“Thus we stick with last week’s bias/ directional views. Base case remains that we start to see more demand for USD/JPY as we move into Q4 on better US data/ increased Fed pricing. Short term risks appear down however given the ¥’s traditional safe haven role.”