USD/JPY: Lower Bound Confirmed But Topside Remains Heavy: Staying Neutral - BTMU

USD/JPY – NEUTRAL BIAS – (112.00-115.00)

USD/JPY has crept up to near the 114-level after Fed Chair Yellen’s slightly hawkish comments before retracing lower.

Recently US economic data was better than expected, but even so topside has been heavy, at below 115. Seasonal cash repatriations and the US dollar weak momentum have slowed USD/JPY rise. That said, the lower bound for USD/JPY was also confirmed.

The BoJ’s yield control operations have caused some volatility, but have not impacted the JPY considerably due to the difficulty in operation structure.

Key currencies have been steady ahead of President Trump’s State of the Union address next week. USD/JPY may also keep trading in a narrow range.

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