MUFG Research discusses USD/JPY tactical outlook and adopts a neutral bias, expecting the pair to remain contained in 106-109 range in the near-term.
"Over the last week, the USD rally at the end of the quarter was mixed with JPY buying among exporters. Financial institutions are taking gains and reshuffling their portfolios at the start of the new quarter, and JPY rates have risen. But the rise has been limited, given mixed USDJY flows," MUFG notes.
The BoJ is not expected to expand monetary easing measures by digging deeper into negative interest rate territory at this month’s meeting, but given the unpredictability, its tone will be important to watch," MUFG adds.