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Forex Flash: AUD/JPY - fasten your seat-belt, it's going to be volatile - Westpac

FXstreet.com (Barcelona) - AUD/JPY is likely to be volatile in coming months, says Sean Callow, currency strategist at Westpac.

Sean explains: "Our base case is for a pullback to around 98-99 over the next month as the BoJ doesn’t announce any new easing measures and investment outflows from Japan remain patchy."

Mr. Callow adds: "By mid-2013 however there is likely to be renewed upward pressure on AUD/JPY, with scope for 107/108, as BoJ easing in full swing encourages Japanese life insurers and others to invest abroad. To reinforce the potential volatility, we look for AUD/JPY to fall back to 94 by end-2013."

Forex: FOMC Meeting ---a major catalysts or non-event?

The EUR/USD finished the day sharply higher, closing up 0.55% at 1.3166. Intra-day the pair traded as high as 1.3186 but was once again unable to take out the 1.3200 level. All eyes will be on the upcoming US session, with both Construction Spending and ISM Manufacturing PMI due out at 14:00 GMT. Following this data, we will get the Federal Reserve Monetary Policy statement at 18:00GMT.
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