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USD/JPY to trade with neutral bias heading into FOMC within 120.25-123.75 range - MUFG

FXStreet (Delhi) – Lee Hardman, Currency Analyst at MUFG, notes that the dollar index and USD/JPY have been pulling back to the 97-level and 121-level respectively this week ahead of next week’s FOMC meeting.

Key Quotes

“A rate hike would generally support USD strengthening, but this has already been priced in. Looking forward, we do not expect aggressive further USD strengthening. Fed Chief Janet Yellen may not show bullishness for further rate hikes at this stage.”

“USD/JPY topside may be heavy, while the lower bound of USD/JPY may be supported by Japanese investors’ capital outflows, especially after the December Tankan survey (December 14) likely shows a positive capex outlook. The December BoJ meeting (December 17-18) may not produce any surprises after positive Tankan results.”

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