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USDJPY: Neutral bias for the coming week – MUFG

FXStreet (Delhi) – Research Team at MUFG, suggest that the USDJPY pair is likely to trade with neutral bias in the coming week within the range of 118.50-121.50 while looking for more evidence that economic slowdown in China undermining Japan’s economy.

Key Quotes

“The recent VW scandal weakened stock markets globally. The risk off sentiment supported yen buying. Next week, lingering bearish sentiment may continue to weigh modestly on USD/JPY.”

“The release of the September BoJ Tankan survey will be watched closely for any further signs of weakening growth momentum in Japan which could weigh on the yen by building expectations for further BoJ easing. The headline of Tankan business condition may be weak as the data was gathered amidst recent heightened concerns over slowing growth in China.”

“However, the BoJ has been keen to assess domestic price recovery momentum. The output price DI (1st October) and corporate price outlook (2nd October) will be watched closely as well.”

“The combination of weakening domestic growth momentum and building BoJ easing expectations are helping to offset support for the yen from more risk-averse global trading conditions in the near-term.”

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