Deutsche Bank have passed judgement on USD/JPY for September and October and say we could be hitting 105-108 if the market grows confident that US growth will run above 3% and the Fed moves to a more hawkish stance. They see the pair moving to 105-108 over Sep-Oct and through 110 by year end.
They also expect the current US growth cycle to continue until 2015/16 and the dollar smashing through 120.
This week they expect the BOJ to stay on hold with Kuroda remaining intent on QQE.
120 sometime next year would be very nice for us longs wouldn’t it?
With the possibility of worse than expected effects from the sales tax hike in Japan, we could see the BOJ upping their rhetoric on easing. That might give USD/JPY a jawbone jump but I feel we’ll still be a long long way off it actually happening. As for the Fed becoming more hawkish, in this environment it’s only a matter of time and the market will get impatient once again, forcing the price moves.
There’s virtually no reason you can find to short the pair at the moment.
USD/JPY – A one way trade?
