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Jan 17 - 09:48 AM

USD/JPY: Consolidating Above 110; A Good Sign For Further Gains Over Coming Days & Weeks - MUFG

Published on Jan 17 - 08:28 AM

MUFG Research discusses USD/JPY outlook and maintains a bullish bias in the near-term.

"The USD/JPY rate looks to be consolidating above the 110.00 level – a good sign for potential further gains ahead. The yen is the second worst performing G10 currency in January mainly due to continued evidence of a pick-up in US economic data and the general favourable financial market conditions. 

While we are sceptical of the economic benefit of the Phase 1 trade deal signed, the economic data released by China today does at least over the near-term reinforce the positive sentiment in the financial markets," MUFG notes. 

"These better conditions for now will likely fuel capital outflows from Japan, reinforcing yen weakness. The weekly flow data from the BoJ indicates this has begun... We see scope for USD/JPY to continue grinding higher over the coming days and weeks, especially if the EU and the US can avoid a near-term escalation in trade conflict," MUFG adds. 

Source:
MUFG Research/Market Commentary

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