According to Yuji Saito, executive director of the firm's FX department in Tokyo
Right, as though we didn't get to see it for ourselves when it happened here this morning.
Okay, back to his point. Saito argues that "it's hard to tell the impact of Cohn's resignation, but as the market doesn't like uncertainty, we'll continue to see a situation where the yen will be bought".
Adding that USD/JPY could be put under downward pressure as the market becomes nervous about trade issues at a time when fiscal year-end repatriation flows typically see yen demand picking up as well.
Saito says the pair could fall below 105.00, commenting that "such a break could lead to a sharp initial decline as many option triggers are believed to have been lined up around the level" and that "the yen could be talked down by Japanese authorities at that point in time, prompting a squeeze of short positions".
Regarding a retracement, he notes that any recovery in the pair will be limited to around 107.50 in the near-term.
