Danske Research discusses USD/JPY outlook and adopts a tactical sell-on-rallies strategy.
"Yesterday, we played the full range as the initial reaction to the weekend’s trade news was knee-jerk negative - bringing it to 104. Later in the day, sentiment improved somewhat on the back of Trump tweeting about renewed progress on trade and not least with Iran, bringing the cross back above 106," Danske notes.
"Our view is to sell the rally in USD/JPY as we have seen such headlines about improvements countless times in the past year (without results) and the economic trend continues to support the JPY. We target USD/JPY short-term at 105 but continue to see further downward adjustment of that forecast as probably being needed,"Danske adds.