This summary of an ANZ note is via the folks at eFX.
ANZ analysts forecast that USD/JPY is more inclined to reach the 150 level rather than descending to 140 in the upcoming month.
- While the weaker employment data may initially provide some relief to the JPY, the longer-term trajectory leans towards a stronger USD.
- ANZ suggests that if the Federal Reserve opts to maintain elevated interest rates, short-end U.S. yields could surpass the 5% mark, pushing USD/JPY to 150.
- Short-Term Relief for JPY: Softer U.S. employment data and yields could offer temporary respite to the JPY.
- Long-Term Direction: The 1-month outlook for USD/JPY leans more towards an upward direction, targeting 150 rather than a decline to 140.
- Federal Reserve Decision: If the Fed keeps interest rates high, short-end U.S. yields could return to above 5%, further boosting USD/JPY to 150.
- Implications for traders and investors:
- Short-term: The JPY may experience a brief respite owing to softer U.S. employment data and yields.
- Medium-term: The 1-month outlook leans towards a stronger USD against the JPY. Positioning for a move towards 150 in USD/JPY may be advisable.