Citi discusses USD/JPY outlook and sees a scope for a move above 140.
"BoJ minutes has not offered any new insights into last Friday’s rate decision. With all policy settings unchanged, this has reinforced the medium term bearish JPY view, and that the bar for JPY intervention by the MoF is as higher than 140," Citi notes.
"CitiFX Technicals sees spot climbing all the way to horizontal resistance at 147.66 (1998 high) now that it closed above the top of a descending channel at 136.04. Though, this close would need to be sustained on a weekly basis to strengthen the argument," Citi adds.
MUFG Research sees a scope for a move towards 140 in USD/JPY over the coming weeks.
"Last week, a week when the 10yr UST bond jumped 30bps on Monday and Tuesday, was another big test that the BoJ again passed and it seems the BoJ will only alter the framework or levels of YCC at a time of their choosing. This most recent passing of the test for the BoJ has now opened up a window of renewed JPY selling with the obvious next target of 140.00 quickly coming into sight," MUFG notes.
"It is likely investors will look to see where in fact the threshold for resisting JPY weakness through intervention truly is. Investors will likely conclude now that it lies somewhere above the 140.00-level opening up scope for further JPY selling in the coming days," MUFG adds.
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