MUFG Research discusses USD/JPY outlook and adopts a bearish bias into next week, expect the pair to trade downward in a 109.50-107 range.
"Market jitters have eased somewhat after Fed Chair Powell indicated the possibility of a rate cut, and USD/JPY could react. But the USD has been softening, factoring in the possibility of a rate cut. The US CPI and retail sales figures are due out next week. If the results do support a rate cut, then the USD could weaken further and overall the downward pressure on USD/JPY could build," MUFG notes.
"Japanese investors are very likely to refrain from JPY selling related to securities investing for some time, and there is likely to be more speculation about a bottom for USD/JPY," MUFG adds.