JPY: Aversion dips should be limited - Westpac

Robert Rennie, Research Analyst at Westpac explains that they have stuck with the view that risk aversion dips 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 a very uncertain near term outlook for the US debt ceiling/ appropriations/ political situation, it’s hard to see a compelling argument for a bounce in USD/JPY. It’s also hard to see Yellen’s speech at Jackson Hole driving much US$ strength.”

“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 given the ¥’s traditional safe haven role.”