USD/JPY could re-test 114/115 – Scotiabank

In view of FX Strategists at Scotiabank, the pair’s outlook remains bullish, allowing for a probable visit to the 114/115 area.

Key Quotes

“The JPY is under-performing somewhat; the BoJ left policy unchanged in terms of its target rate and asset purchase plan, as expected. New policy board member Kataoka dissented, however, stating that there was little chance of the BoJ meeting its 2% CPI objective. Easy BoJ policy prospects clearly contrast with the Fed outlook, driving USD-supportive 10Y bond spreads back to the upper end of the recent range (+230bps)”.

“USDJPY gains through the upper 111 area sustain the short-term bull trend in the market, after the USD appeared to be stalling earlier this week, and confer a more positive outlook on longer-term prospects. Short-term cloud charts are positive and we think the USD may be building for a move up to retest 114/115”.