JPY: Cautious risk environment to keep yen supported - ING
Global markets haven’t batted an eyelid to the House Republicans passing their version of the Tax Cuts and Jobs Act through – not least because the spotlight has been stolen by reports that US Special Counsel Robert Mueller has issued subpoenas to President Trump’s 2016 election campaign officials, according to analysts at ING.
“Add to this noise surrounding US-North Korea diplomacy and it’s difficult to see anything but the US dollar losing out in an environment where policy and political uncertainty remains elevated. Therefore it's no surprise to see USD/JPY down at 112 in a slightly cautious risk environment.”
“The Oct trade figures released - which continues to point to healthy export activity and a solid trade surplus - will be the highlight of an otherwise sparse domestic calendar this week. We note that Japanese markets are also on holiday on Thursday, which lends itself to thin liquidity in USD/JPY in the latter half of the week. Look for the 200-dma (111.75) to be tested this week, which could trigger a more pronounced move down to the low 111 area.”