USD/JPY outlook - risk is below 105
Westpac look ahead for currencies have this on the yen. Given the rally in USD/JPY its worth checking out for risk ahead.
- USD/JPY near the top of the past month's ranges,
- US yields are barely higher
- US data not supportive
- dramatic … slump in the ISM manufacturing index to below 50
- but other releases have been little better
- should keep markets preparing for -25bp from the Fed on 18 Sep and a clearly dovish tone. The BoJ and MoF meanwhile have not indicated any policy change is looming. Considerable bad news is arguably priced into USD/JPY but multi-week risks remain below 105