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Oct 02 - 09:48 AM
USD/JPY: It's Almost Go Time; The Range Is Liable To Break Lower Towards 105 - TD
First appeared on eFXplus on Oct 02 - 08:25 AM

TD Research discusses USD/JPY outlook and highlights a scope for a break lower towards 105 in the near-term.

"We have been of the view that USDJPY would consolidate in a 107/109 range. This process looks nearly matured. The negative surprise in ISM manufacturing has compelled a U-turn near 108.50. We think that if ISM services also slips this week, the range is liable to break lower. This would open a move back to 105," TD notes. 

"The report that the GPIF will reclassify its hedged portfolio as domestic holdings suggests they have more room to buy unhedged foreign bonds - and reduce the need to up JGBs. This should imply 10yr UST-JGB spread compression and anchor USDJPY lower," TD adds. 

Source:
TD Bank Research/Market Commentary

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