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USD/JPY up and away - Scotiabank

FXStreet (Barcelona) - Camilla Sutton, CFA, CMT, Chief FX Strategist at Scotiabank noted the key fundamentals and technical position of the Yen.

Key Quotes:

"JPY is weak; with USD/JPY having traded up to 107.55 as risk aversion has eased. Today’s 3month– debt auction drew an average yield of –0.004%, the first negative auction yield on record; while equities were weak."

"As risk aversion fades USD/JPY is likely to trade back to its fundamentals, which suggest a near-term test up to 109. Political sentiment seems to be deteriorating, speculation that the tax hikes will be delayed are rising and expectations that the BoJ will struggle to sustainably reach its inflation target are all likely to support USD/JPY’s rise. We hold a year‐end target of 109."

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